Essentials of Economic Planning
Meaning of planning
There is a lack of harmony amongst economists and biased thinkers as to the meaning of planning. Planning, in brief, may well be describes as visualizing, commencing, standardizing and controlling monetary action by the State as per the set main concerns with a outlook to attaining well distinct aims within a set time. Thus, in this sense, "A Plan consists essentially of systematic set of policies so designed and inter-related as to promote (and eventually to achieve) stated, and, where possible, quantitatively measureable, objectives, within a given period (or periods)." (Vera Anstey).
Need for Economic Planning
It is easy to know whether an economy is planned or unplanned. The ad hoc economy depends on the market system for the exploitation of the society's sources for creative ideas. The market system reads consumer's first choices to the manufacturer all the way through the means of increased prices and pledge of advanced revenues. A planned financial system characterizes a much more determinate association of sources and exact aims to be attained and the goods to be manufactured. The State is provided with the essential authorities to chase these objectives and take advantage of the sources by the side of the pre-determined canals in compliance with objectives by now set.
The following are the basic requirements or implications of planning:—
(a) Preparation of aims or goals;
(b) Setting up objectives to be accomplished and main concerns of production in all subdivision of the financial system;
(c) Enlistment of the economic and additional resources necessary for the carrying out of the plan.
(d) Building the essential association or agency for the implementation of the plan; and
(e) Creating estimate mechanism for assessing the development completed.
It is immaterial whether there is public ownership and/or control of resources or not, although public ownership and control would be more conducive to effective planning. State initiative and State regulation and control are, however, essential for the successful execution of a plan. Robbins says: "Planning in the modern jargon involves government control of production in some form or other." A central economic authority regulates output, prices and cost$.