|We have noted that the interference of the government with the market mechanism is indispensable because of the failure of the system. Now, the question arises as to what the government role of should be the appropriate in economic management of the country or what should be the form, nature and extent of the government’s interference with the market|
1) Role of the Government in a Capitalist/Market Economy
- To restore and develop the free market mechanism wherever it is possible to ensure workable competitive conditions.
- To remove all unnecessary restrictions on the operation of free competitive market, and
- To provide a background through necessary government interventions, and controls in which free competition can work effectively. Besides, government intervention and its economic activities should deliver what the free market mechanism cannot.