Why was public sector given a leading role in industrial development during the planning period?

Solution

When India attained independence, there was a complete inbalanced economy. The prime concern of the government was to provide 'Food, Shelter and Clothing' to the society. Besides, they had to plan for industrial development. In order to achieve both these objectives simultaneously, it was thought that all important projects like infrastructural development, railways, defence, transportaiton, and telecommunication should be entrusted to public sector and the development of consumer goods industries should be handed over to private sector. Keeping in view these facts, following are the reasons responsible for giving leading role to public sector for industrial development in the economy.

(i) It helps in balanced regional development.

(ii) It keeps a check on growing monopolistic competition in the market.

(iii) It is a major source of employment.

(iv) It is mainly responsible for the security of the country.

(v) It enables the economy to build up a strong infrastructure base.

(vi) It helps in creating a socio-economic egalitarian society.

(vii) It emphasises workers security.

(viii) It provides facilities to improve the standard of living of poor or downtrodden section of society like distribution of free or at concessional rate food grains, cloth, kerosene oil etc. Through the public distribution system

Some More Questions From Indian Economy 1950-1990 Chapter

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Indian Economy 1950-1990

Why was public sector given a leading role in industrial development during the planning period?

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