What are the Advantages Mixed Economy?


It is the mixed form of socialistic and capitalistic economy. Certain economic activities are fully owned and controlled by the government but all the economic activities are not owned by the Government. Private and public sector both co-exist in the economy.

We have adopted mixed economy in India. All the basic industries such as railways, post and telegraph, defence production, atomic energy etc. are in the public sector. Industries dealing with consumer goods are in the private sector. Ours is a welfare state, so the government can nationalise any industry or own any company in the public interest. Mixed economy reduces inequality of income. Due to increased expenditure on public utilities and services, economic benefits to their poor pe9ple are provided.



Mixed economy has got the following advantages:

Rapid economic development

Inmixed economy both private and public sectors work side by side. The combined efforts lead to rapid economic development. The economic resources of the economy are used efficiently. Wastages of resources are minimised.

Lesser inequality of income:


Right to own property is granted. Law of inheritance is also applied, so certain members of society grow richer and richer. Public sector in the economy tries to provide economic facility to the general masses. It reduces inequality of income.

Balanced regional growth:

The planning commission of the country makes policies for the development!”of every region of the economy. The government tries to develop all regions and every section of population.

Freedom to own private property:


Individuals are free to acquire property and retain in their own names, so the initiative to work more and earn more is there. It helps in the rapid development of the economy in the field of agriculture, industry and other services.

Planned development:

The planing commission is empowered to make effective plans for the development of the economy. We, in India, have also adopted planned developmental economy and introduced five year plans.

Public interest:


The public sector looks into the interest of the general public. The government under this economy is said to be welfare state. It introduces social insurance schemes, incurs expenditure and manages economy in the interest of general masses of the country.


Inspite of the above advantages, the mixed economy suffers from the fol lowing weaknesses:

Fear of nationalisation:


Private and public sector coexists. The government has the power to nationalise and own any industry, so private sector remains under a psychological fear that their industry may be nationalised or taken over in the public interest.

Inequality of income:

Inspite of all the efforts of the government to bring equality, rich people grow richer and the inequality prevails. Economic resources economic developments are concentrated with certain big industries.


Corruption is the common feature of mixed economy. Black-marketing, profiteering, dishonest dealings and corruption is seen both at higher and lower levels.

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