Planning is of paramount importance for the economic development of an underdeveloped country. However, there must be certain condition’s or prerequisites for the successful implementation of planning in a underdeveloped country. The necessary conditions for successful planning are summarised below.
Prerequisites for Successful Planning
1. Fixation of Objectives and Targets :
To plan is to act with a purpose. It involves a predetermined end. So before a country would embark on a plan it must nave before it certain clear objectives. These objectives act as the polestar in guiding the ship of the planning authority in its journey towards economic growth. Then it should fix priorities and targets to realize the predetermined objectives.
The resources at the disposal of an underdeveloped country are limited. These physical and human resources are to be utilized for the satisfaction of most urgent needs. Hence the various objectives should be assigned their due priorities. These priorities should be realistic. Besides, they should be consistent and compatible with one another and also flexible.
Thereafter specific targets maybe fixed for different sectors of the economy. These targets may include quantitative production schedules such as so many million tonnes of food, steel, or so many kilometers of road and so on. Such targets are fixed not only for the public sector, but also for the private sector
2. Statistical Information :
For the fixation of priorities and targets it is absolutely essential that there should be adequate and reliable statistical information regarding the entire economy. Economic development is essentially a quantitative concept. Planning in the underdeveloped countries is severely handicapped by the absence of adequate satisfaction. There must be a comprehensive statistical survey to elicit information about the existing and potential resources and also about the mode of operation of the economy in the past. This would enable the authorities to fix goals, targets and priorities and make projections for the future.
Statistical data relating to the various sectors of the economy would give an idea about plan performance. Periodic appraisal and evaluation is possible only when adequate statistical information is available. So in every planned economy there is the necessity of a strong and competent statistical organisation to collect and coordinate statistical data and information. Reliable statistical information constitutes the sine qua non of sound economic planning.
3. Certain Measure of Control :
For the fulfillment of planned objectives a certain degree of control is essential. In fact controls are an inherent part of a planned economy. An economy would cease to be a planned one in the absence of any control. But it is not necessary that all the sectors of the economy should be controlled, or they should be controlled uniformly. Usually only the strategic and important sectors are controlled. Besides, the degree of controls would be influenced by various circumstances. The success of economic planning depends upon the adoption and implementation of a suitable scheme of controls.
4. Maintaining a Balanced Economic Structure :
Economic planning should be so implemented as not to lead to any lop-sided development in the economy. So there should be proper balance in the economy to achieve consistent economic growth. This will secure realism in the planning process. Thus there should be balances between the public and private sectors, between the production and consumption goods sectors, between labour-intensive and capital-intensive techniques of production and also between .Different regions of a country. To achieve these balances the state should carry on agricultural and industrial development and exercise certain controls over the economy.
Lewis warns, us, “In planning the growth of the economy, it is important to get the right balance between commodities and services, since the services sector is too large, the demand for commodities will exceed the supply and inflation and balance of payments deficit will follow. This is checked by projecting separately the demand for commodities and the supply of commodities.”
5. Strong, Competent and Incorrupt Administration :
According to W. Arthur Lewis, a competent and incorrupt administrative staff is the most vital prerequisite for successful planning. Planning is a gigantic task. The job of formulation and execution of a plan is done through the administrative and technical personnel. Developmental planning can have no basis in the absence of a competent administrative machinery.
The administrative personnel must be strong enough to enforce the various measures. The administrative state should also be incorrupt. Actually in an underdeveloped country the scope of corruption is very great. With loose morals, an administrator is likely to tall a prey to corruption. But a corrupt administrative machinery will fail to implement the plans with, zeal and devotion. Besides, it would seriously corrode people’s faith in planning.
People would not be inspired to undergo hardships and sacrifices. Actually in many countries today bribery, corruption, and administration have turned people hostile to the philosophy of planning. While emphasizing on an honest and devoted administrative machinery, Lewis notes: “in the absence of such an administration it is often. much better than governments should be laissez-faire that they should pretend to plan.”
6. An Educational Base :
A competent administration forms the backbone of successful planning. Such an administrative structure can be built only on the foundation of an educational base. A huge administrative personnel, consisting of civil administrators, engineers, technicians, economists, agricultural experts, accountants, etc., is necessary for the formulation and implementation of plans. This is possible only when a sufficiently strong education base is built up to provide general and technical education. Through proper education the abilities, values and attitudes of people can be changed to fulfill the planned objectives.
7. Reasonable Equality of Income :
In the process of economic development, due to certain reasons inequalities of income and wealth grow. But successful planning presupposes a reasonable degree of economic equality. As Oscar Lange remarked, “successful planning for economic development must imply the abolition or least the such concentration of private economic power as would block the realization the plan.” Concentration of economic power also leads to the concentration of political power. The masses arc exploited. People lose their interest and enthusiasm for the planned system.
Popular apathy and indifference doesn’t augur well for the success of planning. If vigorously implemented, planning must reduce economic inequalities in the long run. Still a determined and conscious effort is necessary to achieve a more equitable distribution. the planned system. Popular apathy and indifference does not augur well for the success of planning. It vigorously implemented, planning must reduce economic inequalities in the long run. Still a determined and conscious effort is necessary to achieve a more equitable distribution.