Mixed Economy – Definition, Features and Merits
                     Mixed Economy – Definition, Features and Merits
Mixed Economy 
In a mixed economy system both private and public sectors 
co-exist and work together towards economic development.
It is a combination of both capitalism and socialism. It tends 
to eliminate the evils of both capitalism and socialism.
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Features of Mixed Economy
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Ownership of Property 
and Means of Production
The means of production and properties are owned by both 
private and public. Public and Private have the right to 
purchase, use or transfer their resources.
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Coexistence of Public 
and Private Sectors
In mixed economies, both private and public sectors coexist. 
Private industries undertake activities primarily for profit. 
Public sector firms are owned by the government with a view 
to maximize social welfare.
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Economic Planning
The central planning authority prepares the economic plans. 
National plans are drawn up by the Government and both 
private and public sectors abide. In general, all sectors of the 
economy function according to the objectives, priorities and 
targets laid down in the plan.
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Solution to Economic 
Problems
The basic problems of what to produce, how to produce, for 
whom to produce and how to distribute are solved through 
the price mechanism as well as state intervention.
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Freedom and Control
Though private has freedom to own resources, produce goods 
and services and distribute the same, the overall control on 
the economic activities rests with the government.
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Merits of Mixed Economy
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Rapid Economic 
Growth
The best advantage of mixed economy is that it promotes 
rapid economic growth. Thus, both public requirements and 
private needs are taken care of.
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Balanced Economic 
Growth
Mixed economy promotes balanced growth of the economy. 
It promotes balanced growth between agriculture and 
industry, consumer goods and capital goods, rural and urban 
etc.
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Proper Utilization of 
Resources
In a mixed economy, the government can ensure proper 
utilization of resources. The government controls most of the 
important activities directly and the private sector indirectly.
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