Some of the most important features of economic planning are as follows:
Economic Planning has been adopted in different parts of the world for various reasons.
In socialistic countries, where there are state owned means of production, planning has become an institutional need while is capitalistic countries where private ownership exists (Laissez faire), It is necessitated for the use of resources.
In less developed countries or in developing countries, it is favoured to overcome the bottlenecks and for bringing all-round development. After ‘world depression’, economic planning has become the darling in underdeveloped countries of the world.
The most cherished elements involved in a good plan are as under:
(i) Definite Objective:
The most significant characteristic of economic planning is that it should possess definite objectives. Planning means conscious and deliberate undertaking for a definite objective. For instance, economic planning has the objective to accelerate the rate of growth, elimination of trade cycles, bringing the stability and a attain full employment in the economy.
(ii) Central Planning Authority:
The existence of a central planning authority is another feature of economic planning. This central planning authority is responsible to prepare different schemes of development and coordinating the various activities. The central planning authority takes all decisions relating to production and consumption in an economy.
(iii) Democratic Character:
Another pioneer feature is its democratic nature. No doubt, various plans are prepared by experts but at the same time, adequate opportunities are provided to the people to actively participate at various levels. Being federal structure of Indian Constitution, the Union Government only uses its fiscal, monetary and physical controls to guide and give direction in consequence with the five year plans.
(iv) Only an Advisory Role of Planning Commission:
In the decentralized set up of planning. Planning Commission is the apex body. It provides the necessary perspective, guidance and coordination. Furthermore, it serves as a close link between different agencies so that functioning may be smooth. In this regard, Planning Commission is an advisory character.
Another important characteristic of planning is its comprehensiveness in scope. As central planning authority takes all decisions regarding production, consumption and distribution, thus, it must cover the entire economy which must be comprehensive in scope. In other words, planning must be effective so that the planning of one sector may not be nullified by the absence of planning in other sectors.
(vi) Planning for Consumption:
In a centrally planned economy, it should not be confined to production alone but at the same time, it must cover the distribution and consumption also. In other words, the planning authority should not decide what and how to produce but it must keep in mind and decide accordingly among whom it is to be distributed.
(vii) Rational Allocation of Resources:
Generally, in under-developed countries, available resources are scarce and these resources are allocated in such a manner as to get maximum social welfare. It needs to fix up priorities relating to economic development, thus, allocation of resources in accordance to these fixed priorities.
These scarce resources are also allocated to eliminate wastages for maximizing social welfare, coordinating inter-sector and international plans into a single unified unit which, in turn, promotes economic development in an economy.
(viii) Feasible Policies and Targets:
A good planning is based on the initial resources of the country to achieve the feasible goals and policies. In this way, domestic resources are planned for attaining economic stability.