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Economic planning
refers to any directing or planning of economic activity outside the mechanisms of the market. Planning is an economic mechanism for resource allocation and decision-making held in contrast with the market mechanism. Most economies aremixed economies, incorporating elements of market mechanisms and planning for distributing inputs and outputs.[1] The level of centralization of decision-making ultimately depends on the type of planning mechanism employed; as such planning may be based on either centralized or decentralized decision-making.[2]
Economic planning can apply to production, investment, distribution or all three of these functions. Planning may take the form of directive planning or indicative planning. An economy primarily based on central planning is a planned economy; in a planned economy the allocation of resources is determined by a comprehensive plan of production which specifies output requirements.[3]
Objectives of Economic Planning
Planning is adopted only in Socialistic and Communist countries and also in Mixed Economy
1. Planning decides in which direction the Country should go.
2. How much resources should be allotted to each sectors
3. How much to be produced for the present and future periods.
4. Planning helps the country to achieve what it can achieve in decades if it is left to natural transformation.
5. Planning helps to use the maximum utility of the scarce resources
6. Planning is headed by central committee and it decides the periods to be adopted for planning
7. Even in capital countries where such strict formalities is not adopted they still decide plan ahead for the country
1. Increase in the Rate of Economic Development
One of the most important objectives of Economic Planning is to increase the rate of economic development. Capital formation should be carried out. Infrastructure facilities should be extended and social overhead such as education, technical training and health facilities should be increased. Planning in Pakistan should be done keeping in mind that country is populous and there are too many people looking for jobs, hence labor intensive projects should be given priority, which will absorb labor force and employment opportunities will increase. Increase in employment will increase national income and per capital income. Standard of living of people will raise and rate of domestic savings will increase.
2. Diversification of Economy
All sectors of economy should be given proper importance. No sector of economy should be neglected. Pakistan is an agrarian country, the development of industry of Pakistan depends upon agriculture, therefore more emphasis should be given to agriculture. Since population is too much and it is further increasing at a fast rate, therefore production of food grains should be increased.
3. Price Stability
Increase in price level hits the poor and fixed income people very much, whereas decrease in price reduces profit margins of the businessmen, which causes reduction in investment. One economic planning is to maintain the price stability. Through planning equal distribution of national wealth be made. The society should not be divided between "Haves and Have-nots"
4. Higher Standard of Living
Economic Planning should ensure that good education; technical training and better medical facilities are available to all the people of the country. Every one should be provided a reasonable accommodation. Thus policy should standard of living of the masses.
5. Improving Balance of Payments
All out efforts should be done under planning that balance of payments continues to improve. Export oriented and import substitutions industries should be given importance. Luxurious goods should be banned and small and agro-based industries should be given concessions and facilities. Imports should be reduced and export increased, in order to improve foreign exchange earnings. Dependence on foreign aid and grants should be curtailed.
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Wiki User
∙ 11y ago
Wiki User
∙ 11y agoEconomic planning plays vital role in the process of Economic development. Through planning the state can synchronize their problems and their needs, They properly and fairly allocate their resources.Because of economic planning the comprehensive survey of the country's economy should be made, due to which the progress in the country's economy should be taken every year.
Wiki User
∙ 11y agogovernment will knw how to budget them selves
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What is the definition economic development?
The definition of economic development is the process in which an economy grows or changes and becomes more advanced, especially when both economic and social conditions are improved.
What is the difference between economic development and financial development?
Economic development, generally speaking, is a process of change that is focused on the betterment of the community, state, and/or nation and financial development is a part of of economic development important part.. it is more on financial.
How would you describe economic development?
Economic development, generally speaking, is a process of change that is focused on the betterment of the community, state, and/or nation.
What is economic development?
Economic development is the institutional changes made to promote economic betterment. It is the social organizational changes made to promote growth in an economy. It is also the process of improving the quality of human life through increasing per capita income, reducing poverty, and enhancing individual economic opportunities. In other words, the process of improving the quality of human life through increasing per capita income, reducing poverty, and enhancing individual economic opportunities is called economic development.
How can different economic concepts and theories contribute to a better understanding of development process?
yes
What is the definition economic development?
The definition of economic development is the process in which an economy grows or changes and becomes more advanced, especially when both economic and social conditions are improved.
What is the difference between economic development and financial development?
Economic development, generally speaking, is a process of change that is focused on the betterment of the community, state, and/or nation and financial development is a part of of economic development important part.. it is more on financial.
How would you describe economic development?
Economic development, generally speaking, is a process of change that is focused on the betterment of the community, state, and/or nation.
What has the author H Banerji written?
H. Banerji has written: 'Technical progress and the process of economic development' -- subject(s): Economic development
What is Economic growth and economic development?
what is economic growth and development? Economic development is the institutional change made to promote economic betterment. It is the process of lmproving the quality of human life through increasing per caita income.
What has the author Ann Willcox Seidman written?
Ann Willcox Seidman has written: 'Planning for development in sub-Saharan Africa' -- subject(s): Economic policy, Economic conditions 'The roots of crisis in southern Africa' -- subject(s): American Economic assistance, American Investments, Economic assistance, American, Foreign relations, International business enterprises, Investments, American, Relations, South Africa, United States 'State and law in the development process' -- subject(s): Economic policy, Law and economic development 'Ghana's development experience' -- subject(s): Economic policy, Economic conditions 'Comparative development strategies in East Africa' -- subject(s): Economic policy, Economic conditions 'Legislative drafting for democratic social change' -- subject(s): Policy sciences, Bill drafting
What is economic development?
Economic development is the institutional changes made to promote economic betterment. It is the social organizational changes made to promote growth in an economy. It is also the process of improving the quality of human life through increasing per capita income, reducing poverty, and enhancing individual economic opportunities. In other words, the process of improving the quality of human life through increasing per capita income, reducing poverty, and enhancing individual economic opportunities is called economic development.
What has the author Kempe R Hope written?
Kempe R. Hope has written: 'Development finance and the development process' -- subject(s): Case studies, Economic conditions, Finance, Finance, Public, Fiscal policy, Public Finance 'Economic development in the Caribbean' -- subject(s): Economic conditions 'Internal migration and urbanization in the Caribbean' -- subject(s): Urbanization, Rural-urban migration 'Poverty, livelihoods, and governance in Africa' -- subject(s): Economic policy, Economic conditions, Economic development 'Development in the Third World' -- subject(s): Economic policy, Economic conditions, Economic development 'Guyana' -- subject(s): Politics and government, Economic policy, Political parties, Political participation, History
How does the public sector conceived in the process of economic development in India?
Junior partner
How can different economic concepts and theories contribute to a better understanding of development process?
yes
What factors can impact the planning process?
Consumer demand, time, type of product or product design , the economic and processes
What has the author JAMES M CYPHER written?
JAMES M. CYPHER has written: 'PROCESS OF ECONOMIC DEVELOPMENT'
