What is mixed economy? Why did …

A mixed economy is one in which public sector (consisting of government enterprises) and private sector (consisting of private enterprises) coexist with each other. Here some important decisions are taken by the government and economic activities are by and large conducted through market. Thus both Central Authority and price mechanism play their roles in solving central problems.
In the initial years of planning, India followed the lines of being a socialist economy. Public sector was accorded a dominant role in the growth and development process. However, in the long run it was found that the public sector was plagued with inefficiencies and incurred huge losses. Moreover, excessive control on the private sector hampered their growth and the industrial sector lacked modernisation. All these factors lead to the stagnation of the Indian economy. Thus, in order to boast up growth in the country and to reduce the inefficiency in the public sector, India adopted moved towards being a mixed economy.