ACTIVITY 1

Enrich the definition of Economic Planning

Economic Planning is the process by which central governments make or
influence significant economic choices. It is a resource allocation technique that
uses an iterative process to solve a limited maximum problem. Economic planning
is the process of controlling and managing economic activity in order to make
judgments about what and how it will be generated. It is a hypothetical economic
program for the growth of the regional economic system. An economic
development plan can assist you in realizing your community's economic vision
and gaining control over your financial future. It has the potential to bring
members of the community together with the private and public sectors. You can
set economic growth goals and plan how to achieve them together.

Research on the Types of Economic Planning

 Democratic Planning-

Representatives of the people run the economy in democratic planning.

Representatives are putting economic planning into action. A democratic
constitution with a Parliament elected by the people governs a country like India.
People, through Parliament, make the final decisions on planning. Technical
groups such as the Planning Commission develop a draft overview of the Plan,
which is widely distributed among citizens, economists, social workers, and
political leaders, and take their advice into consideration. Each state takes these
plans into consideration and develops its own master plan, which is then
processed and presented to Parliament. Planning is only put into action if the
Parliament authorizes and votes on finances under various headings. As a result,
the ruling party has the ability to change, improve, and amend the plan. The
Government takes the opposition into confidence for preparing the plans which
would meet with whole-hearted support and co-operation of people.
  Decentralized Planning
The central authority simply sets overall production and investment goals, but
various authorities, such as the state government, are granted complete freedom.
In decentralized planning, the planning authority may use incentives to indirectly
affect economic activities. Decentralize planning is conceived as a more efficient
and more productive in attaining desired result.

 Planning by Inducement
There is no compulsion in this type of planning. The government use persuasion
to carry out particular projects and seeks to sway investment decisions by
providing incentives to entrepreneurs through fiscal and monetary policies. With
appropriate constraints, private firms have the flexibility to produce and
consume. This type of planning may be possible in a democratic capitalist
economy. Induced planning necessitates less sacrifices of individual liberty. The
private sector coexists with the public sector and feels a sense of ownership in the
country's economic progress. It may, however, take more time to attain the same
outcomes as planning by direction. Planning by inducement is also called flexible
planning.

 Regional and National Planning

It is vital to know that regional planning is not intended to ensure regional
independence or self-sufficiency, but rather to fulfill competing claims and local
objectives that cannot be justified economically.  The goal, on the other hand, is
to ensure maximum efficiency in the use of the community's resources while also
reducing regional inequities. They are primarily meant to address regional
inequities that may arise as a result of a comprehensive plan.

 Functional Planning and Structural Planning

Functional planning attempts to modify or improve the existing structure or repair
or rehabilitate it, if it is damaged of disrupted.Functional planning argues that
planning is possible even in a capitalist system, but structural planning adherents
believe that planning and capitalism are mutually exclusive. Structural planning is
therefore revolutionary, whereas functional planning is evolutionary.

 Financial Planning
The allocation of resources and monitoring of resources in financial planning is
done in terms of money. The allocation of resources in terms of men, material,
and machines, which we commonly refer to as natural and human resources, is
referred to as physical planning. The first is that money is essential for economic
planning. The physical aims of any plan may be difficult to attain if appropriate
funds are not available.

 Physical Planning
Physical planning attempts to quantify development effort in terms of factor
allocations and product yields in order to maximize income and employment. We
must preserve physical balances between investments and liabilities. The
investment co-efficient is determined. These co-efficients represent the amount
as well as the composition of investment in terms of various kinds of commodities
required to achieve a desired growth in production of a product.

 Planning Under Mixed Economy

A highly extensive planning should be out of the question in a mixed economy. It
is possible to plan a program for the public sector. The plan can work in both the
organized private sector and huge industries. The planning authority, on the other
hand, feels severely hampered in the organized rural sector.
Reference:

http://www.unishivaji.ac.in/uploads/distedu/extraunts_ba3ecoeng_150313.pdf