Model Answer
0 min readIntroduction
The role of government extends beyond maintaining law and order and providing essential public services; it also encompasses actively fostering economic growth and social welfare – functioning as a ‘promoter’. This promotional role is rooted in the concept of market failures, where the free market alone may not efficiently allocate resources or address societal needs. Historically, governments have intervened to stimulate industrial development, encourage innovation, and ensure equitable distribution. In contemporary India, this role is increasingly complex, balancing state-led initiatives with the principles of liberalization, privatization, and globalization, as evidenced by policies like ‘Make in India’ and ‘Digital India’.
Understanding the Government as a Promoter
The government’s role as a promoter signifies its active involvement in creating an environment conducive to growth and development. This isn’t merely about direct investment, but encompasses a broad spectrum of activities aimed at stimulating economic activity and improving social indicators. Promotion can be categorized into three main forms:
- Direct Promotion: This involves direct participation in economic activities, such as establishing public sector enterprises (PSEs), providing subsidies, and undertaking infrastructure projects.
- Indirect Promotion: This focuses on creating a favorable ecosystem through policies like tax incentives, credit guarantees, and skill development programs.
- Regulatory Promotion: This involves establishing rules and regulations that encourage competition, protect consumers, and promote innovation.
Forms of Government Promotion: A Sectoral Overview
1. Economic Promotion
The government actively promotes economic growth through various means:
- Industrial Promotion: Initiatives like ‘Make in India’ (2014) aim to boost domestic manufacturing by attracting foreign investment, improving infrastructure, and streamlining regulations. Prior to this, policies like the Industrial Policy Resolution of 1956 laid the foundation for a mixed economy with a strong public sector.
- Agricultural Promotion: Subsidies on fertilizers, minimum support prices (MSPs), and irrigation projects (like the Pradhan Mantri Krishi Sinchayee Yojana - PMKSY, 2015) are used to incentivize agricultural production.
- Financial Sector Promotion: The government promotes financial inclusion through schemes like the Jan Dhan Yojana (2014), providing access to banking services for the unbanked population. It also regulates the banking sector through the Reserve Bank of India (RBI) to ensure stability and growth.
- Infrastructure Promotion: Investments in roads (Bharatmala Pariyojana), railways, ports (Sagarmala Project), and airports are crucial for economic development. The National Infrastructure Pipeline (NIP) aims to attract investment in infrastructure projects.
2. Social Promotion
The government also plays a vital role in promoting social welfare:
- Education: The Right to Education Act (2009) guarantees free and compulsory education to children aged 6-14. Schemes like Sarva Shiksha Abhiyan (SSA) and Samagra Shiksha aim to improve access to and quality of education.
- Healthcare: The National Health Mission (NHM) and Ayushman Bharat (Pradhan Mantri Jan Arogya Yojana - PMJAY, 2018) aim to provide affordable healthcare to all citizens.
- Social Justice: Schemes like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA, 2005) provide employment opportunities and social security to rural households. Reservations in education and employment promote social equity.
- Skill Development: The Pradhan Mantri Kaushal Vikas Yojana (PMKVY) aims to provide vocational training and skill development to youth.
Evolving Role of the Government as a Promoter
The role of the government as a promoter has evolved significantly over time. From a highly interventionist approach in the post-independence era, India has gradually moved towards a more liberalized economy. However, the state continues to play a crucial role in addressing market failures, promoting inclusive growth, and ensuring social justice. The current emphasis is on creating a ‘facilitator’ role, where the government provides a supportive environment for private sector investment and innovation. This includes streamlining regulations, improving infrastructure, and investing in human capital.
| Era | Government’s Role | Key Characteristics |
|---|---|---|
| Post-Independence (1947-1991) | Dominant Promoter | State-led industrialization, strong public sector, import substitution, centralized planning. |
| Liberalization (1991-2000s) | Facilitator & Regulator | Privatization, deregulation, opening up to foreign investment, focus on fiscal consolidation. |
| Contemporary (2000s-Present) | Strategic Promoter | Public-Private Partnerships (PPPs), targeted subsidies, emphasis on infrastructure development, skill development, and digital economy. |
Conclusion
The government’s role as a promoter is multifaceted and dynamic, adapting to changing economic and social realities. While the degree of intervention has varied over time, the fundamental objective remains the same: to foster sustainable and inclusive development. Moving forward, the government needs to focus on strengthening its regulatory capacity, improving governance, and promoting innovation to effectively address emerging challenges and unlock India’s full potential. A balanced approach, combining state-led initiatives with private sector participation, is crucial for achieving long-term economic and social progress.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.