Economic Planning: Rationale, Features and Objectives

Economic Planning in India

1. Economic Planning: Rationale, Features And Objectives Chandrika Soni Assistant Professor Department of Economics, Gaya College, Gaya

2. Introduction In general, Planning is deciding in advance what is to be done, when, where, how and by whom it is to be done. It includes the selection of objectives, policies, procedures and programmes from among alternatives. Planning has been one of the pillars of our approach to economic development since independence. Planning is not a static concept and each of the plans has reflected the changing imperatives of the times.

3. Economic Planning Economic planning means state intervention in an economy, as opposed to the free play of market forces. However, any form of state intervention in an economy must not be confused with planning. It may be noted that such governmental intervention can be thought of as concerted, deliberate attempt of alternative method of allocating economic resources to achieve some pre determined goals either to replace/ supplement the market mechanism. There is no agreement among economists with regard to the meaning of the term “economic planning”.

4. Continued This means allocation of limited resources among different uses in such a way as to bring about the maximum welfare of the people. It consists of two basic elements: Determination of objectives (targets) Provision of means for the achievements of the objectives. Thus , Economic Planning is an exercise of organizing and utilizing scare resources and allocating them in accordance with the pre-determined priorities so as to have maximum social welfare within a specified period of time.

5. The Rationale for Planning Limitation of the market mechanism. Need for social justice Resource mobilisation and allocation in the context of overall development programme (i.e., the choice of development projects has to be based on social benefits rather than private profitability).

6. Features of Planning in India The main features of planning in India are: Indicative Economic Planning Indian Plans are comprehensive Physical planning Indian Planning has been Social Planning Unreliable data

7. Need for Economic Planning Backward Technology Industrial Growth was negligible Low level of Literacy High rate of growth of population Low per capita income Social and Economic problem created by partition of country.

8. Objectives of Economic Planning Economic growth Reduction in income inequalities Balanced regional development Modernization Sizeable increase in national income and per capita income. Improve agricultural production Self reliance Elimination of poverty Removal of unemployment Inclusiveness and sustainability of growth

9. Planning Commission of India Planning Commission was set up by Resolution of the Government of India in March, 1950. The task before planning commission of India are: Effective utilization of resources. Preparing plans along with its objectives. Coordinate with state government for execution of plan Determination of priorities, stages of plan and purpose of allocation of resources (i.e., increasing production, providing employment opportunities, etc).

10. Thank you