what is the economic implication of functional and structural planning?
Answers
Answer:
(1). Direction and Inducement Planning:
(i) Planning by Direction:
Planning by direction is an integral part of a socialist society. It assumes complete absence of laissez faire.
ADVERTISEMENTS:
Therefore, it implies complete centralized planning with no features of a private economy. Under planning by direction, planning authority takes charge of the productive resources and use them in accordance with social priorities.
In other words, there is one central authority which plans, directs and orders the execution of the plan. Market forces are not allowed to operate freely. Both saving and investment are strictly controlled by the planning authority. The state holds the commanding posts in its hands by taking over entire private industrial and agricultural sectors and banking and transport. “Without such concentration, the state would lack the means to carry out the tasks of the plan. Provisions in the plan would be mere pious wishes without any guarantee of realization attached to them.”
Planning by direction is comprehensive and embraces the entire economic life of the country. Russia provides the best example of planning by direction. Under such planning, the targets for optimum planning can be realized. Full employment can be ensured. Oligopolistic and monopolistic tendencies can easily be eliminated.
Arguments against Planning by Direction:
Explanation: