chapter  6
32 Pages

Formulation and Implementation of the Central Plans

WithChu-yuan Cheng

This chapter analyses the development of central planning system, analyzes the pattern and procedure of plan formulation, inquires into the mechanism of plan implementation, and examines the problems confronting the central planning system and the proposals for its reform. Essentially, central planning in a Soviet-type economy is a hierarchical system of organization, a pyramid-type structure with a planning elite at the top issuing orders concerning output and production technique and a multitude of production units at the bottom carrying out those orders. Of the central and local government organs, three sets of agencies are directly involved in economic planning. They are, respectively, responsible for information collection and evaluation, plan formulation and coordination, and plan implementation and supervision. The primary goal of central planning is balanced and proportionate growth. The methodology employed in central planning is called comprehensive balance-between state revenue and expenditures, between the supply of and demand for commodities, and between the inflow and outflow of cash.