Planning & Regional Economics

Micro Planning Micro Planning deals with only specific parts of the economy. For instance: Planning for a region or a town, planning for the development of sugarcane or for textiles production.

Macro Planning National economic planning is a macro planning because it deals with the whole economy.

Definitions of Planning Various definitions of planning have been given by different writers.Each emphazising one or the other aspect of economic planning:

• (a) Prof. Wilhelm Keilhan thinks Economy consists in a totality of planned efforts to realize certain purposes.

• (b) Mrs. Wootton thinks Economic planning is a system in which the market mechanism is deliberately manipulated with the object of producing a pattern other than which would have resulted from its spontaneous activity.

• (c) Prof. D.R. Gadgil thinks the planning for economic development implies external direction or regulation of economic activity by the planning authority which is, in most cases, identified with the Government of the state.

• (d) Lewis Lordwin defined planning as a scheme of economic organization in which individual and separate plants, enterprises and industries are treated as co-ordinate units of one single system for the purpose of utilizing available resources to achieve the maximum satisfaction of the people’s needs within a given time.

1.2 HISTORICAL OVERVIEW OF PLANNING

Norway Prof. Kristian Scholeyder was first introduced, Russian planning is a one of the economic activity. In Russia 1928 introduced the 1st five year plan. In 1934, Sir M. Visvesvarry published a book namely “The planned Economy for India”. This book created new interest in the minds of the people and as a result few more book appeared on planning.

Jawaharlal Nehru, the architect of planning in India, set up the National planning committee towards the end of 1938. In the National Planning Committee (NPC) eight industrialists conceived ‘A plan of Economic Development’ which was popularly known as the Bombay plan. There was also a Gandhian plan prepared by Shriman Narayan. The world famous revolutionary M.N. Roy formulated the people’s plan. In August 1964, the Government of India created by Planning and Development Department under the charge of Sir A. Dalal. In 1946, a Planning Advisory Board was set-up by the in trim government. In March 1950, the planning Commission was set up with the fourfold objectives.

Types of Planing There are several types of planning some of them are:

1. General Planning and Partial Planning

(a) General Planning: The plan covers all aspects of the economy and the central authority completely controls the investments and utilisation of resources.

(b) Partial Planning: It is a sort of piecemeal planning, the plan that covers only some important aspects of the economy. Strictly speaking, partial planning is no planning.

2. Functional Planning and Structural Planning

(a) Functional Planning: Planning may be attempted within the existing social economic framework. Functional planning attempts to modify or improve the existing structure or repair or rehabilitate. Functional planning is evolutionary e.g., Indian economy after the partition.

(b) Structural Planning: It may seek to change the economic structure radically. Structural planning s revolutionary, e.g., China.

3. Planning by Inducement and Planning by Direction

(a) Planning by Inducement: This is planning through the market mechanism. The planner either subsidises production or controls price intended to increase the consumption of a commodity. Planning by inducements avoids swollen bureaucracy.

(b) Planning by Direction: There is complete absence of Laissez Faire central authority. This plans directs and orders the execution of the predetermined targets and priorities based on comprehensive in nature. This sort of planning is bound to be inflexible. Black markets emerge to overcome the imperfection of the plan.Planning by direction also leads to excessive standardization which impinges on consumer’s sovereignty. For instance: Russia.

4. Physical and Financial Planning

(a) Physical Planning: Physical Planning is concerned with the physical targets, i.e., targets in terms of the output to be achieved or some other targets in concrete terms e.g., materials, men,power etc. physical planning require the fixation of physical targets in terms of production and other services.

(b) Financial Planning: Planning is the outlay in terms of money is fixed, the estimates are made for the various hypothesis regarding the growth of the national income, consumption, import etc. to cover the outlay by taxation, savings and the increase in cash holdings. Financial planning really implies that the real resources exist and can be diverted to the desired channels.

5. Perspective Planning

This means long-term planning in long range targets are set in advance for a period of 10 to 25 years. To achieve the objective this plan may be divided into several short period plans, 4 to 6 years for greater precision and to avoid unpredictable changes. A five year plan is further broken up into annual plan. The annual plan is further divided into further sub-plans for each branch such as plan for iron and steel, a plan for export and so on. A perspective plan reflects long-term targets while the current plans and sub plans are the necessary support for the former to achieve those targets.

6. Indicative Planning

The French type of planning is based on decentralization in the operation and the execution of the national plan is known as indicative planning. The mixed economy in France is distinct from other mixed economics in the world. The private sector and public sector works together. The state controls the private sector may co-operate in fulfilling the targets and priorities of the transportation, fuel, firm machinery, electricity, tourism, steel, cement, fertilizer etc.

Notes

7. Capitalist Planning and Socialist Planning

(a) Capitalist Planning: Under capitalism planning involves extensive state control over business and a conscious and co-ordinated endeavour to promote economic growth or stability. There is unfettered functioning of price-mechanism. In the system planning involves price control. For instance: USA.

(b) Socialist Planning: Under Socialism, state is all and all. Instruments of production are owned and managed by the state. The state is in a position to plan all economic activity and to mobilize and use the country’s resources deems to fit. All economic activity is directed towards socially prescribed goals and to predetermined priorities. For instance: Russia and china.

8. Rolling Planning and Totalitarion Planning

(a) Rolling Plan: In rolling plan three new plans are made and acted upon. First there is a plan for the current year. It includes annual budget and foreign exchange budget. Second a plan for 3 to 5 years, it is changed every year in keeping with the requirements of the economy. Third, is a perspective plan for 10 to 20 years is presented every year in broader goals are stated and the outlines of future development are forecast.

(b) Totalitarion Planning: This means central control and direction. There is no opposition, no freedom but people hold a different view. In Totalitarion Planning may be the degree of control and direction of economic forces occurs. It is making for the economic system more perfect and maintain stability and achieving growth.

Main Implications of Planning

• (a) Formulation of objectives or goals to be achieved with in a certain time.

• (b) Fixing targets to be achieved and priorities of production for each sector of the economy.

• (c) Mobilisation of the financial and other resources required for the execution of the plan.

• (d) Creating the necessary organisation or agency for the execution of the plan.

• (e) Creating assessment of machinery for assessing the progress made.

1.3 IMPORTANT FEATURES OF ECONOMIC PLANNING

1. Survey of the Economy: The first step in economic planning is to make a detailed study of the existing economic conditions in the country. The resources available, of the extent to which they are utilized and the economic problems facing the country.The present state of the economy is thoroughly surveyd.

2. Setting the Targets and Objectives: A plan must have clearly laid down goals. These goals are called targets and objectives. A target means what is aimed at. The target must not be expressed in general or vague terms. Tragets must be quantifiable. For instance production targetas of cereals should be mentioned in, say, million tones.

3. Fixing Priorities: ‘Priority’ means arranging the different development projects in an order of importance or urgency. Priorities should be laid down on the basis of short-term and long-term needs of the economy. It is keeping in view of the available materials, capital and human resources. Development programmes should be executed first are given top priority.

While the less important ones receives low priority. For instance:India’s First Five year plan, top priority was given to the development of agriculture, but in Second Five year plan priority given for industrial and mineral development.

4. Implementation: To make a plan successful,sincere efforts must be made to achieve the targets. If efforts are lacking or misdirected, the plan be only on paper and achievement will be nill. Therefore a strong,efficient and dedicated administrative machinery is necessary for the successful implementation of a plan.

5. People’s Co-operation: An economic plan is for impoving their standard of living by increasing their income for their people. People should know the aims of the plan that they may offer their support and co-operation for the success of the plan.

6. Central Planning Authority: An economic plan pre-supposes the existence of a central planning authority entrusted with the responsibility of drawing up a blue-print or plan for the country as a whole.

1.4 NEED FOR PLANNING OR OBJECTIVES OR AIMS OR OBJECTIVES OR AIMS OF PLANNING

Objectives: Scope

Planning: Objectives and Importance of Planning

Economic planning is often regarded as technique of managing an economy. When the structure of an economy becomes complex and subject to rapid change and transformation (due to population growth, discovery of resources, industrialisation, etc.) some sort of advance thinking becomes necessary to resolve that complexity and to prepare the economy for those changes. Such preparation is called planning.

Most often that not an economic plan is regarded as a programme of action. It may also be taken to mean an instrument for regulating a free private enterprise economy. The regulatory measures may vary from country to country.

They may leave either too much or too little a degree of freedom to private enterprise. This may hamper the working out of the plan. Many plans leave their programmes incomplete because they hesitate to exercise their regulatory functions. They are little more than a list of public development projects.

Many other plans perform their regulatory functions with such seriousness and severity that their programmes of action are completely jeopardised. In such planned economies any sort of enterprise ceases to exist. The correct plan is one in which a comprehensive and consistent programme of action is sought to be implemented by carefully harnessing enterprise for the success of the plan.

It should be noted that a plan is just a programme of action, it is not a guarantee for action. In short, a good plan is one which makes adequate provisions for and ensures that its targets are properly fulfilled.

Objectives of Planning

The objectives of planning are many and varied. These aims are not the same for all countries, not are they same for the same country at all times.

Some major objectives of economic planning are:

(a) An improvement in the standard of living of the people through a sizable increase in national income within a short period of time;

(b) A large expansion of employment opportunities for the removal of unemployment and for creating jobs and incomes;

(c) A reduction in all types of social, economic and regional inequalities;

(d) An efficient utilisation of the country’s resources for faster growth;

(e) Removal of mass poverty within a definite time limit through land reform, employment creation, and provision of educational and medical facilities;

(f) Attainment of self-reliance by reducing dependence on foreign capital and foreign aid.

Summarize the core insights in focused prose and reinforce what matters most.

You’ve seen planning defined as a deliberate program to reach measurable economic and social goals, whether at the national level or for a region or sector. The concrete parts that matter most are target-setting, resource mobilization, priority sequencing, implementation capacity, and monitoring. Targets must state what to produce in physical or financial terms (for example, wheat output in million tonnes or a capital outlay of a fixed rupee amount). You’ll get practical results when you make those targets specific, assign who will deliver them, and link required funds and materials to the responsible agency.

Different types of plans change how you act: perspective plans set long horizons (10-25 years) and split into shorter five-year and annual plans; indicative plans guide private players without heavy direction; and rolling plans keep a short-term operational window that updates yearly. Picking the right type means matching your time horizon to the uncertainty you expect and the level of control you can exercise. You’ve got this when you tie the plan’s type to realistic administrative reach and fiscal capacity.

Concrete steps repeat across contexts: survey current resources and performance, fix quantifiable targets, rank projects by priority, allocate budgets and inputs, set up a dedicated implementation unit, and measure progress against milestones. The “why” behind each step is simple: clear targets focus effort, priorities allocate scarce resources where they matter most, and continuous monitoring catches slippage early so you can reallocate before problems compound.

Offer a realistic 30-day implementation path with practical weekly milestones.

Week 1: Survey and Target Drafting. Collect recent production, budget, and resource-use data for the area you plan (region, sector, or project). Write two concrete targets (one physical, one financial) - for example, increase local irrigation coverage by X hectares and allocate Y rupees of capital. You’ll finish with a one-page target sheet you can share.

Week 2: Priority and Resource Match. List candidate projects and rank the top five by criteria: impact, cost, and feasibility. For each top three, attach required inputs (labour, materials, finance) and the implementing unit. Use a simple table or spreadsheet; you’ll end the week with a prioritized project list and a gap-flag for missing inputs.

Week 3: Implementation Setup. Assign a lead officer for each top project, set clear monthly deliverables (e.g., procure pumps, clear 200 hectares), and agree funding release triggers. Create one monitoring indicator per project and set a weekly check-in day. By Friday you’ll have sign-offs and a calendar for the first quarter.

Week 4: First Review and Adjustment Plan. Run the first monitoring check: compare planned deliverables with actual progress, list bottlenecks, and reroute resources where needed. Draft a short adjustment memo with three corrective actions and the person responsible. Close the month with a clear “next 90 days” task list. You’ve set a manageable rhythm - keep it going.

Close with concrete advice for maintaining progress and adjusting after first results.

After your first results, keep what worked and fix what didn’t with targeted tweaks. Keep monitoring simple: one headline indicator and one operational KPI per project (for example, hectares irrigated and pumps installed). Hold a weekly 20-30 minute progress call; use that to unblock actions and record two decisions only - this keeps momentum without bureaucracy. When a project slips, diagnose the root cause in a focused checklist: funding, procurement, workforce, or permits. Address the immediate constraint, reassign one resource, and set a 7-day recovery action. Use a named tool like a shared spreadsheet or a basic project tracker (LibreOffice/Google Sheets) so everyone updates the same data - no new software hassles.

Finally, treat the first quarter as testing. Expect some targets to need recalibration; revise them based on measured capacity, not hope. Document one lesson learned per project and circulate it to stakeholders. You’ve set up the structure; keep it light, keep it measured, and you’ll keep advancing - small consistent wins add up. You’ve got this.

End of chapter one. 144 more chapters and about 96,666 words in the full book.