What Economic Compulsions Influence Planning?

Among the economic compulsions, one can refer to some of fundamental changes that have taken place in the economies of industrialized nations since the times of classical economists making automatic regulation of the economy an impossible task.

One basic change relates to the increased lead time required by modern production. It is not the actual process of production that takes longer now a days but the preparatory period that has immensely increased. This is true in case of projects like a steel mil, a chemical plant, an electronics factory, and an automobile plant. Take the case of feasibility or designing stage.

Furthermore, machines are to be manufactured or imported, modern facilities to be installed, a large complex of buildings to be created, supply of inputs such as raw materials, water, power and gas to be ensured, labor to be produced and necessary skills to be imparted, a group of professional personnel to be trained, research apparatus to be organized, markets to be assessed and downstream industries using its end products to be identified and consciously promoted to be expanded.

For example, the whole process of manufacturing a car takes only a few days to complete from supply of the iron ore to car fitted with all the necessary accessories rolling down of serialized production.  The significant cut in production time was however made possible due to an increase in preparatory time.