Demerits of Mixed Economy

Mixed economy efforts from several limitations which are as follows :

• Economic Instability : Sometimes, violent fluctuations occur in the level of economic activity due to the fracture of market mechanism or faulty implementation of economic plans.

• Lack of Freedom : A mixed economy is a semi-controlled economy. Producers, workers and consumers all get freedom of choice but subject to some constraints.

• Inefficiency : When there are two many regulations and controls, private sector cannot function very efficiently. Public sector enterprises do not operate efficiently due to bureaucracy and red tapism. India’s mixed economy us often. Criticized for its inefficient and corrupt administration.

• Lack of Coordination : The public sector and the private sector do not always work in a complementary manner. Some economists even that there cannot be a middle path between capitalism and socialism.