Special Case of Under-developed Countries
The arguments given above apply to all countries at nil stages of economic development. They largely take their stand on the failure of liaise afire policy and its general abandonment. It is now realized that lack of co-ordination. recurrence of business cycles. economic inequalities, social parasitism. economic insecurity. wastes of competition. absence of industrial peace and huge social cost which characteristic an unplanned economy. can be done away with by resorting to planning. An unplanned economy must act in an erratic irrational manner
But planning has a specially strong case of the under-developed economies. In their case, it is not merely necessary to maintain the country’s economy in sound health and to ensure a rational and optimum use of the community’s resources but also to speed up economic development. They are lagging behind in the race and they are keen to catch up with the advanced economies or at any rate reduce dependence on them as fast as possible. Till impatience for accelerating economic development leads inevitably to economic planning. The achievements of the Russian and Chinese economies under planning serve as an example
The private enterprise in India has not taken India any far on the road of economic progress. It has left untouched and undeveloped some of the vital sectors of the Indian economy. The entrepreneurial ability is lacking in India or exists only in an insignificant measure. The Indian entrepreneurs take up hack.
Prof. D.R. Gilead indicates the need for, notification of. planning in these words,for economic development is undertaken presumably because the pace or direction of development place in the absence of external intervene considered to be satisfactory and because it is held that appropriate external intervention in increasing considerably t;c pace of and directing it properly. Plano seeks to bring bout a rationalization and. if possible and necessary, reduction of consumption to evolve and adopt term plan of appropriate investment of capital with progressively improved techniques. a pro of training and education through which penitence of lab our to make use of capital increased. and a better distribution the national product so as to attain social security and peace. Planing, therefore. means, in a sense, no more than better organisation. consistent and far-seeing organisation and comprehensive all-sided organisation. Direction. regulation. controls on private activity. and increasing the sphere of public activity are all parts of organisational effort.