A welfare state has following three features -

(i) It is a positive state that uses its power to implement social policies for the betterment of society. It is of interventionist nature.

(ii) Welfare state emerges from democracy and democratic institutions.

(iii) A welfare state means the co-existence of both the private and state owned enterprises. The public sector emphasises on basic goods and social infrastructure, while the private industry produces consumer goods. So both the needs of development are fulfilled.

A.R. Desai is critical to accept Britain, USA and countries in Europe as welfare states due to following reasons -

• These states have exaggerated claims though they are not even able to provide basic social and economic security to their citizens.

• The economic inequality still prevails in these societies.

• The process of development in these states is dependent of market fluctuations.

• Existence of a high level of unemployment along with excess economic capacity indicates the failure of welfare state.