What Is A Medium Term Plan?

          A medium term plan is generally of five year duration. It may however range between 4 to 7 years depending upon peculiar needs and consequent discretion of a country. Annual plan in handicapped due to shortage of time. A single year is too short period to accomplish anything. A five year plan, on the country has the advantage of reasonable time for maneuvering and achievement of solid results.

          A five year plan is a general statement of objectives and targets relating to economy as a whole and its various component sectors. It is not an authorizing document in the sense that it does not authorize expenditure to the relevant operating agencies. It provides a broad framework for formulation of plans. The successive annual plans are so designed as to fulfil the objectives set in a five year plan. It can be compared to a chain made up of a linked series of annual plans.

          Preparation of medium term plan is a time consuming exercise and may take two or three years to finalize its proposals. Therefore, spade work starts quite ahead of the actual time to its initiation. While an ongoing plan is in the third year of its operation, preliminary work on preparation of a new five year launching and timely completion is to be ensured. Although it affords more time compared to a short term plan for the achievement of results, yet the time plan is not adequate to realize the long term objectives. There is an inevitable overcrowding of projects. Its precision rate is however higher compared to a long term plan. Forecasting is always a wet ground to play upon: longer the period greater the risk of a fall or a slip and shorter the period, brighter the chances of more precise and accurate forecasts which is the main business of planning.