Why Planning is Necessary in Economics

The Need for Planning

Introduction

From the third decade of the twentieth century, the concepts and ideas of planning began to gain importance. After World War II, no one denied its usefulness. 1980-90 there is hardly a country in the decade where economic planning is not followed. The great benefits of economic development through economic planning by different countries. The people of the backward countries are shocked to see that. In any case, the multi-benefits would have been possible at that time. When economic development programs are launched under regular discipline. Work done in such a careless manner does not have useful results.

Example

It has been observed that we carry out many tasks in our daily life with regularity and discipline. The same approach if adopted for economic growth in simple words, it can be called economic planning. Technically, economists have come up with different definitions of economic planning. Let's take a brief look at those definitions that are considered to be more or less authoritative.

Different Opinions

1.            According to Professor Arthur Lewis, an economic code that outlines the country's economic problems, lists government spending and the performance of the private sector Integrating is called economic planning.

2.            According to Diskenson, economic planning refers to the country are the economic decisions of an authoritative body that are concerned with what to create, how to produce, for whom to produce and in what quantity.

3.            Professor L. J. Walinsky to L. J. Walinsky according to the plan, economic planning is a set of rules in which targets are set by reviewing the match of resources and economic policies are formulated to achieve them.

4.            Dr. Najman (Dr. Benjamine Higgins says that economic planning is about government projects, private sector business activities and social welfare.

A disciplined outline of programs.

Comparison

Comparing these definitions of economic planning, it is clear that the definition given by Professor L. Dominic Sky is more plausible.  Consider their resources to solve it and then spend their resources wisely to reach the destination. If this practice is spread over the whole country, it will be called economic planning. In economic planning, we first set development goals, then accumulate resources to achieve them, and finally distribute those resources according to purpose. And after choosing the various definitions of economic planning and the definition of the look at the issues in the light of which the need for planning becomes important.

Pricing mechanics

In the capitalist system, the task of allocating resources is entrusted to the "price mechanism". The forces of supply and demand keep shifting resources from one sector to another. Since every individual. There is freedom to pursue personal gain, so everyone invests in the sector where the rate of return is higher. In such cases, it is sometimes the case that there is no investment in the most lucrative but most important sectors in terms of national utility. Investors give up these areas. Sometimes capital is used in very short-term sectors and long-term plans are left in abeyance. In this context, there is an urgent need for the government to take steps to meet national requirements and continue the process of economic development. There is a sense of necessity and usefulness in economic planning.

The need for planning

The following are some of the things that economic planning requires.

Accelerated Economic Growth

There are many sectors in every economy where people do not like to invest due to many constraints. In Pakistan, such sectors include Tarbela Dam, Qasim Port and city construction. These sectors are mainly long term. The private sector cannot wait long for profits. That is why they give up such fields. If the government does not plan for these sectors, the pace of economic growth in the country will surely slow down. Therefore, it is said that when a country wants faster economic development, it needs a plan for such development. Development of the private sector at the same time, planned sectors are also developing. Otherwise, incomplete floating is good for the economy.

Proper use of Resources

If the creation of wealth is entrusted to the private sector only, then it is possible for them to start showing interest in the creation of things that are not in the national interest or that are not considered a necessity in life. With regard to the supply and demand of the market, it is likely that many people will fall, Jhang, opium will also be involved in the production, trade and sale of drugs because of the high profit margins in these sectors. The creation and open trade of these goods is against public health. By banning these items, the government can divert resources through planning to the production of milk, bread, butter, ice cream and other healthy items. Only through planning can it be possible to discourage the production of luxury items. The government can guarantee better use of resources by preventing unwanted items.

Prevention of Unemployment

In a free economy, the price system cannot be relied upon to ensure that the problem of unemployment does not arise. The period of global recession and unemployment, which began in 1929, opened the floodgates of capitalism's shortcomings that employment opportunities continue to grow due to better use of resources in the system. The fact is that even in 1929, it was never up to the manufacturers to stop the recession and unemployment. Only the government can make plans for this great cause. She can create short- and long-term employment plans for people whose primary goal is to increase employment opportunities.

Rooting out Regional Inequalities

Not all areas or provinces or cities of any country benefit equally in terms of economic development and availability of natural resources. Somewhere the population is dense, somewhere there are oil wells, somewhere there are more industrial factories. Therefore, each province or region has a different status in terms of economic development. The independent system of the three adds to the regional disparities. Developed areas are becoming more developed and poor areas remain poor. This inequality can only be overcome through planning. The government implements established establishments and factories under its supervision in areas that are relatively poor and backward. Even following the government, capitalists start investing in these areas. Similarly, due to the full and dual focus on the backward areas, the regional economic disparity seems to have narrowed.