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Constitutional Framework OfState Control Of Business

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Characteristics of

Indian Constitution 1) Sovereignty: India is anindependent republic and not

subordinate to any other nation.2) Democracy: govt. is run by

representatives who are elected by

the people of the nation.3) Secularism: complete freedom toits citizen to preach & practice

their religion.

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Contd.4) The parliamentary system: ministers and the prime minister

are answerable to the parliament.5) Separation of powers:

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Federal System of the

Govt. Meaning: where the powers of thecentral govt. and State govt. are

well-defined. Division of powers between the

Central & State govt. has been done

through three lists : The Union List The State List

The Concurrent List

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Functions of the StateFunctions of State

The basic functions Activities that are Undertaken only by the State

Intermediate FunctionsGovt. can work in collaboration with civil Society & markets

Activist functions Active participation of Govt. for promoting markets

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Contd. The Basic Functions:- i. Providing pure public goodsii. Defenceiii. Law & orderiv. Property rightsv. Public healthvi. Protecting the poor

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Basic functions Contd.vii. Macroeconomic stabilityviii.Antipoverty programmesix. Disaster relief

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Intermediate Functionsi. Addressing externalities:- basiceducation, environmental protection

ii. Regulating monopolies:- consumerprotection, financial regulations.iii. Providing Social Insurance:-

pensions, family allowances,unemployment insurance.

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Activist Functionsi. Coordinating private activityii. Fostering marketsiii. Asset redistribution

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2.Promotional Rolesi. Development of infrastructureii. Assistance by way of subsidiesiii. Allocation of scarce resourcesiv. Fiscal, monetary and other

incentives

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3.Entrepreneurial Roles Govt.s participation in businessthrough public ownership and

management of industrial andcommercial undertakings. Balanced regional development

Promotion of capital intensiveindustries

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4.Planning Roles Socio-economic development Social justice Balanced regional development Rapid industrialization Employment generation Development of agriculture & small

scale industries

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Rationale of State

Intervention1) Legal framework2) Imperfect competition

3) Externalities4) Social objectives5) Industrial base6) Balanced regional development7) Self reliance

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Thank You