The main features or elements of planning are discussed in detail :
(a) Determinate authority :
Planning is a very complex task. It implies conscious and coordinated efforts to achieve predetermined objectives. This naturally presupposes the existence of a central planning authority. The presence of a central planning authority is a sine qua non for effective and successful planning. This central authority formulates the plan. It prepares the blueprint. In a planned economy production and distributive decisions are not arrived at by the market forces, It is the central planning authority which fixes the targets and suggests measures towards the fulfilment of these decisions. This central planning authority is known as the planning commission in India. In the Soviet Union it is known as the Gosplan.
(b) Goals and objectives :
Planning always envisages certain predetermined objectives. To plan after all is to act with a purpose. So the aims and objectives of a plan tire laid down in advance, before the planning process actually starts. Hence under every type of plan there are certain well-defined objectives which the planning authorities strive to attain. These objectives, however, might be different under different circumstances. A plan might have a single objective or there might be a number of objectives placed in order of their priorities.
There may be short-run or long-run objectives. These objectives may be economic, social or political. Certain important objectives of planning, for instance, are maximization of economic growth, maximization of national income, improvement in the standard of living, reduction in economic disparities, full employment of labour, etc.
(c) Fixed time periods :
In a planned economy there are not only well defined objectives. In addition, targets are fixed for the attainment of those objectives within a specified period of time. The goals must, relate to a period of time. The time specified may be any period. Planning has a time dimension. Consequently there may be short-term, medium-term or long term plans. Plans may be for one, four, five or ten years. It is not necessary that a country should always follow a plan of a certain time period, say five years.
Due to exigencies of situation a country instead of a five-year plan, may decide to pursue a seven-year plan. To make the idea of planning more concrete and meaningful, a starting date and a terminal date also should be mentioned. Efforts are made to realize the targets within the specified period. This provides a direction to planning. This also indicates the degree to which the planned efforts have been successful in the realization of the goals. In certain sectors the targets, could not be realized within the given time, the authorities may take necessary corrective measures.
(d) Growing importance of the public sector :
Planning is a socialized activity. The state has to play a crucial role in consciously and deliberately directing this activity. The desired predetermined objective may not be achieved through the free play of the market forces. Since the private sector is guided by the sole consideration of making profit, it, may fail to use optimally the economic resources of the country, and unleash forces of economic growth.
In such a case the state has to come forward to develop the basic infrastructure of the economy or to develop productive activities which require huge initial investment or which have a long gestation period. Similarly, public investment may be necessary for the fulfillment of certain socio-economic objectives like reduction of economic inequalities, achieving a balanced rate of growth and so on.
(e) Comprehensive planning :
In the true sense of the term, planning means comprehensive planning of all the sectors. In plan literature we may speak of planning through the market or planning by each individual production unit, etc. In reality, however, planning cannot be isolated and piece-meal. Planning implies a rational utilization of the economic resources so that there should be proper harmony and coordination among all the sectors of the economy. So piece-meal Government regulation to improve the functioning of the market mechanism is not planning. Planning should not be confused with mere economic directives and controls. It encompasses the entire economy. Planning implies national economic planning covering the whole of national life.
(f) Regulations and controls :
Regulations and controls constitute an integral part of planning. A planned economy is regulated and controlled by the state. It is not left to the vagaries of free and automatic forces of market operations. In an unplanned capitalist economy there is hardly any control worth the name. People enjoy unbridled freedom in exercising their choices in the field of production, consumption, exchange and other forms of economic activity. In such an economy, if there is any control at all, it is "invisible". A planned economy, however, is-bound to take recourse to controls with a view to achieve the predetermined objectives of planning. Thus, there may be control of production and consumption. Similarly, there may be control on prices, wages, import and export, savings and investment and so on.