Planning

Planning 

What Is Planning?

If we go with the general planning definition, it is simple to understand. It is basically about thinking and making the arrangements according to the routine and thing you want to follow or achieve! However, does economic planning differ from planning? Let’s take a look at it. 

Economic planning: 

It’s hard to gain a simple description of economic planning that is both precise and acceptable to everyone. As a result, various philosophers have characterised economic planning in various ways, bearing in mind the objectives to be reached and the means of attaining those in consideration. Except declaring that planning is a methodology, approach, with the aim being to achieve clearly defined objectives. 

The process through which central governments make or influence significant economic choices is economic planning. It compares with both the laissez-faire strategy, which, in its simplest form, rejects any attempt to move the economic activities and instead relies on economic forces to decide the velocity, pace, and type of revolutionary progress for the economy’s growth.

Economic planning consists of several components, and considering these factors; planning is formulated, these are as follows: 

• Targets or ambitions that have been established and well defined
• The goals must be met within a certain period, basically for an extended period
• A central authority exercises purposeful control and direction over the economy regarding economic management
• Optimal use of environmental resources that might be limited and manpower, which may well be plentiful
• The execution of various economic activities such as raising output, optimising employment, and limiting population increase such that output exceeds population explosion

Type of Planning (Economic Planning) 

1. Democratic planning 

The economy is controlled by presiding officers through democratic planning. Members are in charge of economic planning. A democratic constitution governs India, with such a Parliament representing the people. This same public, via Parliament, makes the final choices about planning. 

2. Decentralised planning 

During a decentralised plan to carry, the sovereign sets overarching production and investment goals, but different organisations, such as the state government, are allowed many leeways. They set their output objectives within a federal structure at various levels, such as central and state levels.

3. Planning by inducements 

There’s no coercion in this type of planning process. However, sometimes administration employs inducement to carry out particular projects and seeks to sway investment decisions and deliver incentives to businesses using government spending.

4. Financial planning 

Functional planning and physical planning are two types of planning. For example, the project budget and monitoring of resources in financial management are done in finance. On the other hand, the distribution of capacity in terms of persons, equipment, and machines, usually referred to as rich natural resources, is referred to as physical planning. 

Conclusion 

After going through the article, it is pretty clear economic planning is essential for an economy to do in the first place. Still, it could vary as per the recruitments and problems of the respective nation. However, there are certain qualitative and quantitative aspects that all economies first consider before opting for economic planning. It is essential to ensure the efficiency and effectiveness of economic planning in the long run.