Mention the main features of mixed economy.

The mixed economy is a combination of both capitalist and social economy and it combines the advantages and disadvantages of both type of economies. In this type of economy private players are allowed to have a level of freedom, but also government interfere to achieve social welfare. In a mixed economy, both public and private sector exists. Private players have freedom of production, but government take control over some the production of some of the goods and services which are important for social welfare, like basic needs like water, health, electricity, gas, petroleum etc.

Features of a mixed economy are mentioned below

(I) Co-existence of Private and Public Sector:

Under this system, there is co-existence of public and private sectors. In the public sector, industries like defence, power, energy, basic industries etc., are set up. On the other hand, in the private sector all the consumer goods industries, agriculture, small-scale industries are developed. The government encourages both the sectors to develop simultaneously.

(ii) Administrative prices – in mixed economy system there us duel system for determination of prices of goods and services, prices are determined by market forces like in capitalist type of economy, but in some cases in order to preserve social welfare, the government can determine the prices of some goods which are for common use by society, like prices of gas or petroleum.

(iii) Economic planning – the mixed economy is planning the economy and here government plan the budget for major projects, infrastructure and other expenditure which are common use by society. Planning is done for infrastructure like road, bridge, water, sanitation etc and for services like health services.

(iv) Regional balance: Government have control over area for social welfare like health, food security etc and planning is done to ensure regional balance.

(v) personal freedom: In a mixed economy, there is full freedom of choice of occupation, also the consumer has a good number of options to choose things for consumption, may not be as much as in capitalist economy, but in essential commodities consumer interest is also protected as government can control the prices for social welfare.