INTRODUCTION

Mixed economy can be defined as a blend of elements of both centrally planned socialism and market-driven capitalism. There are some important features of mixed economy. One of the most common examples of a mixed economy is India. The country operates on a system of mixed economy which consists of both the public sector and private sector. The government plays a very important role in healthcare sector, education and development of infrastructure. The post-independence policies greatly shaped India's mixed economy, whose objective was to achieve self-sufficiency and equitable growth. Important sectors such as defense, railways and banking is controlled by the Government, which allows private organizations to flourish in other areas. Apart from India countries like Sweden, Canada and United Kingdom are operated under mixed economy. Each of the country exhibits different degrees of intervention of the Government and private organization to flourish in other places

• Majority of the production factors has been owned by the private organizations and businesses
• A very important role has been played by the Government in regulating and directing the activities of economy in very important sectors like education, healthcare and infrastructure
• Prices, wages and resource allocation is determined by market forces which allows competition and efficiency.
• Implementation of social welfare programs are often done by Government and inequalities are addressed and provide a net of safety for the disadvantaged individuals.

DISCUSSION

There are certain advantages and disadvantages of having a mixed economy. The mixed economy allows a balance in between efficiency of the economy and welfare of the society. It also initiates the stability of markets during the economic downturns. On the other hand the intervention by the government can lead to bureaucracy and resource allocation inefficiency. Government support resilience may increase dependency and entrepreneurship may be discouraged. There might be a risk of regulatory capture where government policies are encouraged by powerful interests to their advantage.

“Role of Government in mixed economy”

• Regulates the markets to ensure balanced competition and monopolies are prevented
• Public goods and services are provided like education, healthcare and infrastructure
• Implementation of social welfare programs so that inequalities are addresses and provides a net of safety for the citizen.
• Through certain polices which promote sustainable growth and development economic development is guided.

Difference between Capitalism, Socialism and Mixed Economy

Conclusion

A mixed economic system seeks to harness the efficiency of markets whilst addressing additionally the shortcomings and inequalities which could arise from a pure approach driven by market. The government plays a very significant role in healthcare sector, education and development of infrastructure. The post-independence policies greatly shaped India's mixed economy, whose objective was to achieve self-sufficiency and equitable growth.

FAQ’s

Who coined the term mixed economy?

The term "mixed economy" has not only been coined through a single individual, however it emerged as a idea to describe economical systems that integrate elements of each capitalism and socialism. However, it gained prominence in academic and policy discourse all through the mid-20th century. The concept of a mixed economic system is frequently attributed to “John Maynard Keynes”, a British economist whose thoughts greatly motivated financial coverage for the duration of the early to mid-20th century. Keynes endorsed for government intervention in the economy to stabilize fluctuations and promote complete employment, which aligns with the standards of a mixed economic system.

Who is the father of mixed economy?

Economists like “John Maynard Keynes”, as stated priorly, and others such as “Friedrich Hayek”, “Milton Friedman”, and “Karl Polanyi” have all contributed to shaping the information and implementation of mixed economic structures. And hence there is not a single "father" of the mixed economic system, as it emerged as a result of the evolution of financial thought and policy over the years.

 In which five-year plan India opted for mixed economy. 

India began to implement a mixed economy as soon as it gained independence in 1947. However, the second five-year strategy (1956–1961) made clear that the mixed-economic model had been formally adopted. India placed a strong impact on a mixed economic framework throughout this plan era, in which the state and the private sector both contributed significantly to economic growth.