Mixed economy is that economy in which both government and private individuals exercise economic control. It is a golden mixture of capitalism and socialism. Under this system there is features of free market economy pdf of economic activities and government interferences for the social welfare.
Hence it is a blend of both the economies. The concept of mixed economy is of recent origin. The developing countries like India have adopted mixed economy to accelerate the pace of economic development. Even the developed countries like UK, USA, etc.
In mixed economy; government takes huge initiatives to control monopoly practices among the private entrepreneurs through effective legislative measures. Other steps like concessions, the main responsibility of the government in this system is to ensure rapid economic growth without allowing concentration of economic power in the few hands. In a mixed economy, the government encourages both the sectors to develop simultaneously. In public sector — the subsidies are given to the poor people and also job opportunities are provided to them. Whenever and wherever demand is necessary, the concept of mixed economy is of recent origin.
Mixed economy is that economy in which both public and private sectors cooperate. Under this system there is co-existence of public and private sectors. In public sector, industries like defence, power, energy, basic industries etc. On the other hand, in private sector all the consumer goods industries, agriculture, small-scale industries are developed.
The government encourages both the sectors to develop simultaneously. Under mixed economy, there is full freedom of choice of occupation, although consumer does not get complete liberty but at the same time government can regulate prices in public interest through public distribution system. In mixed economy, private property is allowed. However, here it must be remembered that there must be equal distribution of wealth and income.