Following are the advantages of mixed economy :

• Adequate security : In mixed economy, an individual enjoys adequate security in economic sphere – an individual can spend his income freely, and can choose any occupation according to his interest and qualification. Freedom of obtaining personal benefit and owning property exists to a certain limit. 
• Decline in economic disparity : Economic disparity is a curse for any economy. The government imposes progressive taxes to decrease economic disparity in mixed economy. It makes efforts to check monopolistic tendencies, so that economic equality may be established in the society. 
• Efficient division of resources : In mixed economy, both public and private sectors work jointly and try to use the resources in an optimum manner. The private sector tries to make optimum use of these resources along with the motive of earning profit. The social sector uses these resources with the objective of social welfare. 
• Economic equality : In mixed economy, effort is made to obtain the objective of economic equality without sacrificing economic freedom Check is imposed on increasing prosperity of the private sector, and efforts are made to establish social security and economic equality in its place. 
• Freedom from exploitation : Mixed economy makes efforts to free the poor and middle class of the society from monopolistic tendencies and exploitation by the landlords. It implements welfare schemes for private workers and farmers. It forms laws and develops cooperation. 
• Planned and rapid economic development : Indeed, price mechanism does work in a mixed economy, but it is not provided complete freedom. Appropriate survey regarding the resources available in the country is done, planning is done about how to use them and their partnership in economic development is fixed. As the public sector plays an important role, balanced economic development of the country takes place and capital formation gains momentum.

Demerits of mixed economy : 

Following are the disadvantages of mixed economy:

• Difficulty in appropriate implementation : A mixed economy is formed by combining both, capitalist economy and socialist economy, and both of these have contradictory’ beliefs. Therefore, difficulty arises in their appropriate implementation. Neither economic planning is able to work well for this economy, nor does the infrastructure work well. 
• Unstable economy : Instability is present in mixed economy. The private sector makes the public sector useless, and the economy gets transformed into a capitalist economy. Sometimes the public sector becomes powerful to such an extent that it eliminates the private sector, due to which socialist economy gets established. 
• Incapable planning : In a mixed economy, a very large part of the economy remains out of government control and this part works for its personal greed and thus it becomes a major obstacle in success of plans. The public sector becomes unable to fulfill its objectives. 
• Corruption : Corruption is found to exist in a large extent in mixed economy. Political parties misuse the public sector for their personal greed and the private sector adopts the path of corruption to break laws continuously in order to break loose from government control for its personal benefit, due to which economic development is hindered.
• Black money : Another disadvantage of mixed economy is that this economy encourages black money Due to being a democracy, it becomes possible to form such laws over here which give birth to inequality of income in the economy. On one hand, there is excessive imposition of taxes, and on the other hand, tax evasion takes place, due to which black money increases in the economy. 
• Threat to democracy : Economic planning and government policies can gradually eliminate economic democracy. There is always a fear of emergence of dictatorship in the economy. In fact, this is only an apprehension. In a democracy, the actual power vests with the public at large.

Indian Economy – A mixed economy : India became a mixed economy after the industrial policy of 1948 and the first fiveyears plan. Industries were categorically divided in the industrial policies of 1956, 1977 and 1991. In the first five-year plan of India, developmental programmes and objectives were separately determined for both private and public sector. In 1954, inspired by the objective of establishment of a socialist society, the important role of public sector in economic development was understood and rapid industrialization took place.

In India, planned developmental policies implemented in a span of around 60 years resulted in rapid economic development, elimination of unemployment, check on centralization of economic power, balanced industrial development, agricultural development and increased social welfare, etc. Professor K.N. Raj has written that, “Although Indian economy is a mixed economy, yet the elements of mixed economy have retained it in the form of a capitalist economy and not as a socialist economy.”