Profit-making or societal welfare, what should be the government’s motive?

There are three types of motives, usually, the Government focuses on. The three aspects are,

1. Profit Making
2. Welfare Maximization
3. A Balance between the two

Accordingly, they are termed as Capitalistic, Socialistic and Mixed Economy respectively. What is surprising is that India which once believed in the spirit of a mixed economy now has turned its back towards this intention and is following the spirit of capitalism.

Creeping Rise of Capitalism in Today’s India

There has been a change in economic policies over the last few decades in India. If we retrospect the previous times of our Indian economy, we will notice that it was tending to be socialistic. If we look at Indira Gandhi’s economic policies, we will see that she nationalized the banks of India. Compare to that, if we look at the recent economic policies of today’s India, we see that privatization is the new policy.

The Jio model!

In a mixed economy which India claims to be in how was such a business decision was allowed to be enforced in the country? The policy that was implemented by Reliance Digital on freely distributing Jio sim cards and giving free data. Without any retrospection of the policy and its long-term impact, how did the Government give a green signal to such a policy?

By green signalling, this policy, the Government of India has not only welcomed Capitalism which is based on the laissez-faire state concept (business policies not to be modulated by Government).

Which is better – Profit Making or Welfare Maximization?

For an economy to survive both is very crucial. In other words, like every human being, none of the economies can be unbiased. It has to be either tending to be profit-making or based on maximizing societal welfare. But it should not be such that the welfare of the society is forgotten while giving the upper hand to profit earning and vice versa.