When we attained Independence in 1947, we inherited from the Britishers an economy which was impoverished due to neglect and over-exploitation during the Second World War. The urgent task that befell us was that of reconstruction and rejuvenation of our economy so that it could develop and sustain itself on a continuing basis without any assistance from foreign countries. The task is so gigantic that even after twenty years of devoted effort, much remains to be done. Under such circumstances there can be no scope for a rigid doctrinaire approach if we are to succeed. It is, therefore, natural that the Government has attempted to achieve maximum results through adoption of a mixed economy.
The Industrial Policy Resolution of 1956 was on these lines, and it envisaged that in vital sectors where in the interest of the country it was not proper to allow individuals to function, the State alone will operate. In a large number of other branches of industry, the State allowed the existing private organisations to continue but has taken upon itself the responsibility of future development and growth. There is still a large number of industries which have been and will continue to be left to private initiative, subject, of course, to supervision and social control by the State. The corner stone of the State policy in this regard will have to be constant vigilance to see that industrial order promotes welfare of the people and there would have to be a willingness to step in where there is a danger of either exploitation or mismanagement which can be detrimental to the national interests.
The second sphere in which we want to bring about a marked change from the capitalistic order is in the sphere of disparity of incomes and concentration of economic power. Various ways and means have been devised and will have to be devised to see that the economic concentration in the hands of a few does not take place and that even the present degree of concentration is reduced. The State supervision and control through various bodies like Company Law Board and similar organisations in other fields will have to continue and, if necessary, further tightened to achieve this goal. Since we foresee that we will allow private initiative and enterprise to play a significant role in the economic development of the country, the setting up of an effective machinery to keep a constant vigil to prevent this concentration of economic power assumes importance.