When quick change, the economy becomes more complex, there is a need for advanced thinking to resolve and help prepare the economy for those changes. It is a technique for managing an economy. When due to population growth, new resources being discovered, industrialization, and the economy become more complex. To solve the problem of change and rapid growth, it becomes necessary that some type of advanced analytical thoughts is used, which will help the economy prepare for the changes. This is the main role in economic planning.
Role Of Economic Planning
From country to country, the rules and the regulatory measures change. In some places, it might be used as a program of action. In some other places, it may be used to bring new changes and change the atmosphere in a free private company. Following is the role of economic planning: –
One of the main and primary roles of economic planning is to increase the country’s employment rate and economic development. There should be better utilization of the workforce by increasing the employment opportunity. An increase in the per capita income and the reasons as to why there is an increase is the main concern about economic development.
To be self-sufficient. It is an objective of many countries to be self-sufficient and not import food grains and raw materials such as steel and iron. For a country to be self-sufficient, it needs to raise the rates of savings and investments.
Sustainability And Role Of Economic Planning
Maintaining stability is one of the main roles in economic planning and is also an important part of growth. If the prices rise and frequently fall of daily products, there are chances to create some structural imbalances in the economy. The rise and fall of prices should not be out of proportion and should maintain stability.
In a country, there is a possibility that some states are more economically and regionally more developed than others, and it should not happen.
One of the main objectives of economic planning is an all-round development of the economy. All the sectors, such as transport, agriculture, power, and heavy industries, should be developed.
If the capita per income, price stability, etc., will increase, it will lead to a higher standard of living.
Pros And Cons
Advantages of economic planning: –
If the prices are kept at the minimum, then everybody could afford the goods and the services.
Since the allotment of the resources is being planned centrally, there is no chance of duplication.
Disadvantages of economic planning: –
The companies may be inefficient as there is an absence of profits.
Communication between the government and companies can take a lot of time to happen.
The allocation of the resources can be done in a planned and timely manner, which leads to equality among all. Understanding economic planning also helps a person in understanding how household areas are disturbed due to economic downfall. We have listed out some important advantages and disadvantages of economic details and how the role of economic planning can contribute to the development and productivity with the country.