There are four well defined stages through which an economic planning has to pass for its successful operation.
Stages of Economic Planning
1. Formulation:
The first stage in planning is the formulation of the general objectives of the plan and their definition in specific quantitative terms.
The task of the formulation of the general objectives of the plan is generally performed by the Planning Commission alone. The Planning Commission is a body of experts and specialists in different fields of activity.
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The Planning Commission in India consists of Chairman, Deputy Chairman and six Members. It is the function of the Commission to formulate a plan for the most effective and balanced utilisation of the country’s resources.
It makes an assessment of the resources of the country and appraises from time to time the progress of the plan and recommends the necessary adjustments of policy and measures. The Planning Commission is only an advisory body and has no power to implement or execute the plans.
2. Adoption:
The adoption of the plan is the function of either the Parliament or the Government. The Parliament can make any changes in the plan it likes but generally it does not make any drastic changes in the draft of the plan. Any far reaching changes effected in the plan will upset the entire plan and necessitate its reformulation by the Planning Commission.
There are little possibilities for making changes in the Plan by the Parliament or the Government because the Planning Commission consults it fully at the formulation stage.
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As soon as the Plan is adopted by the Parliament it acquires the force of law and becomes the statutory obligation of the government to execute.
There are countries like Jamaica and Pakistan where national development plans are not placed before the Parliament for approval. Plans in these countries are considered to be an expression of the government’s economic policy.
3. Execution:
The Planning Commission is an advisory body and has no executive functions. The execution or implementation of the Plan is the responsibility of the central and state governments in their respective spheres.
The various Government departments and agencies are entrusted with the task of executing the Plan and maintain continuous liaison with the Planning Commission, because every plan, however well drawn up, has to be changed during its execution to adapt it to the new situations. Implementing a plan is more difficult than making it. Making a plan is an exercise of imagination, while implementation is a struggle with reality.
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Before crossing the Atlantic, the pilot of an aircraft plots his course in relation to expected weather and wind conditions. Once aloft, reality is found to differ from expectations; the plan must be modified continually to cope with changing facts.
Two organisations that assist the Planning Commission in the implementation and evaluation of the plan programmes are the Committee on the Plan Projects and the Programme Evaluation Organisation. The success of a plan rests very largely on the efficiency with which it is implemented.
Much of the criticism against planning in India falls in the field of implementation. Our experience with the working of the various plans has shown that the effective implementation of plan projects has been the weakest link in the chain of the planning process.
Criticising this aspect of Indian planning, John Lewis has sarcastically observed that Indians are better planners than doers. There have been more failures than successes in the execution of development plans.
4. Evaluation:
One of the functions of the Planning Commission is to appraise from time to time the progress achieved in the execution of each stage of a plan and recommend the adjustment of policy and measures that such appraisal might be necessary.
Planning cannot be considered good unless it takes into account the course of the fulfillment of the plan. Planning is no more filing up of tables and figures unrelated to the course of fulfillment of the plan. If the plan is not bound up with plan fulfillment, it becomes a mere scrap of papers.
The supervision of the plan needs an independent body of experts unconnected with plan formulation or plan execution.
This body of experts should evaluate plan fulfillment in a strictly impartial manner. It should bring to the notice of the government the failures and shortcomings which it notices in the course of its evaluation.
Planners in India have not neglected this aspect of planning. The Programme Evaluation Organisation, an independent organisation, has been set up by the Planning Commission. This organisation restricts itself to the evaluation of work done in the community project areas.
What is needed is that the whole development programme envisaged in the plan should be brought within the scope of this organisation. The Commission has been issuing progress reports on the implementation of the five year plans.