What Are The Needs And Role Of Development Planning?

Larger saving and investment:
In a market economy investments are determined by the time preferences of individual savers. These preferences of inventors may not be compatible with the social goals. The individual preferences are irrational; the irrationality consists in discounting the future properly. On the other hand, under planned economic system, not only the amount of savings and investment can be greater, but the investment can also be made in those fields commanding greater social considerations.

Problems rising from foreign trade:
Now days the problems of foreign trade have become more acute. The UDCs have to face the persistent deficits in their BOPs. The terms of trade are going against them. They have to confront with the protectionist policies on the part of DCs. the debt burdens are mounting. The international financial and developmental agencies charge heavy interest rates. The gap between have and have nots is increasing day by day. Such all problems relating to open economy are attributed to market economy. Therefore, to remove them some type of planning is required.

Co-ordination between economic activities:
In laissez fairer economy every body is inspired of self interest. As a result, it may happen that some goods are produces in abidance while there is shortage of some goods.