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The fundamental goal of economic life is to satisfy human wants, which are essentially limitless. All of a modern society’s economic activities are geared toward meeting human needs with limited (scarce) resources.
The scarcity of resources forces society to make choices and allocate resources. Economic resources are in short supply in comparison to the demand for alternative uses. The primary economic problem is allocating scarce resources to satisfy human desires in the most satisfying way possible.
What is economics planning?
Economic planning is the development of specific policy measures to plan for future economic actions. These actions will be carried out in the future in accordance with predetermined economic objectives.
As a banking aspirant, you must be familiar with this topic for both the Mains and the Interview rounds. It is necessary to understand the concept of economic planning and its history in order to be competent in your work as a banker.
Let us now understand how economic planning is carried out in India.
What is economics planning in India?
India’s commitment to planned economic development reflects our society’s determination to improve our people’s economic conditions, as well as an affirmation of the government’s role in achieving growth performance through a variety of social, economic, and institutional means. The ultimate goal of Indian planning is to achieve a broad-based improvement in the overall living standard of society. Rapid growth is required to increase incomes and employment. It provides the necessary resources to finance social uplift programmes.
What are the objectives of economics planning?
Long-term objectives and short-term objectives are the most common types of planning objectives in India.
Long-term goals attempt to address the socio economic issues that the country has faced over the years. It includes raising national income or per capita income, achieving full employment, achieving social justice and equitable distribution, alleviating poverty, achieving self-sufficiency and modernization, and so on.
Attaining all of these goals would be referred to as ‘Growth with Social Justice.’ Short-term objectives are plan-specific goals that must be met within the scope of the plan. They are frequently concerned with allocating resources to various sectors of the economy based on immediate demand as envisioned by policymakers.
Nature of economics planning
Historically, the concept of central economic planning was associated with criticism of capitalism as an anarchistic and greed-driven system. Marxist critics did not give much thought to how the economy would be run after capitalism was abolished; most of them claimed that organising the society that would follow would be simple.
When the new Soviet government gained control of all means of production in 1917, it had no idea what to do next. The Soviet Union’s evolution of central economic planning was largely pragmatic; methods were tried and discarded, and new ones were introduced. The decision to embark on rapid and large-scale industrialization in 1927 necessitated the centralisation of control, as only the government could take on the task of marshalling the country’s productive resources in order to achieve its lofty goals.
What is the importance of economic planning?
At the national level, it helps determine interest rates, the size of the money supply, and which areas are lagging or gaining ground. It assists a family in determining whether a savings plan is performing well enough to hope for retirement someday.
The government keeps track of everything:
These assist planners in seeing what is happening across millions of consumers and businesses. Without these measures, there would be no way to determine whether taxes are too high or too low, and we would know even less about when a downturn is on the way.
It’s important, but it’s not everything. Even with everything we can see and all the levers we can pull, the end result is the samit.
Who loads economics development planning?
The economic development plan is frequently led by an economic development professional, such as an economic development practitioner or economic development officer, though this can vary depending on the economic development model chosen by the community.
The plan should be reviewed on a regular basis to ensure that it is up to date. Typically, plans must be updated every three to five years to reflect changing community needs and priorities.
Conclusion
The fundamental goal of economic life is to satisfy human wants, which are essentially limitless. Economic resources are in short supply in comparison to the demand for alternative uses. The primary economic problem is allocating scarce resources to satisfy human desires in the most satisfying way possible. Economic planning is the development of specific policy measures to plan for future economic actions. It is necessary to understand the concept of economic planning and its history in order to be competent in your work as a banker. India’s commitment to planned economic development reflects our society’s determination to improve our people’s economic conditions, as well as an affirmation of the government’s role in achieving growth performance through a variety of social, economic, and institutional means.
