A collisional radiative (CR) model has been developed for the diagnostics of Ne-Ar mixture plasma. The 40 fine-structure resolved energy levels of neon corresponding 2p 5 3s, 2p 5 3p, 2p 5 3d, 2p 5 4s, and 2p 5 4p along with ground state (2p 6 ) and ion state (2p 5 ) have been considered. All the essential population and de-population channels viz. electron impact excitation-de-excitation, ionization, two/three-body recombination, radiative decay, self-absorption correction, diffusion, etc., have been considered in the model. The quenching of relatively higher lifetime states 2p 5 3s due to interaction with Ar atoms through associative and Penning ionization is also included in the model. The applicability of the CR model is demonstrated by performing the optical diagnostic of rf induced inductively coupled Ne-Ar mixture plasma. The plasma parameters viz. electron temperature, electron density, and population distribution of levels at various mixture conditions are extracted by coupling the present CR model predictions with emission and absorption measurements by Boffard et al. [J. Phys. D: Appl. Phys., 45, 382001 (2012) and private communication]. The results are also compared with earlier optical models and Langmuir probe measurements.The self-absorption correction (escape) factors and electron impact excitation rates at various Ne-Ar mixture concentrations are also presented.