investments and other input requirements are then determined for each year of the
plan (the constraints). Thus, in multisectoral planning, we need projections for the
demand of final commodities, sectoral outputs, sectoral investments, other sectoral
inputs, imports, and exports over the period of the plan. Finally, the government
specifies the direct and indirect policy instruments that it intends to utilise to achieve
the sectoral aims of the plan.
Multisectoral planning is essential to ensure the consistency of intersectoral plans
in the economy and to help determine the most productive use of the limited
resources of the developing nation. The consistency of intersectoral flows can be
tested with product and factor balances or more precisely with an input-output table.
The efficiency of sectoral investments can be analysed with more complicated linear
programming models. Linear programming is also a method for calculating the
shadow prices which correspond to the equilibrium conditions and thus correctly
reflect social costs.
5.6.3 The Medium Term Plan
Planning has an important use: decision-makers are forced to stop and think about
the long-range goals, and the immediate actions required to achieve these longer
perspectives.
In the context of a medium term Plan, the general policy guidelines would be as
follows:
1. Determine policy regarding variables which be controlled.
2. Use a proper and adequate forecast estimate.
3. Plan for adequate capacity units (of the upper steps of Fig. 5.2).
4. Avoid under (over)employment by maintaining a more or less stable work force.
5. Monitor stock.
6. Maintain flexibility to address fluctuations in requirements.
7. Respond to demand as per established rules.
8. Assess and monitor the planning at regular intervals.
5.6.4 The Short Term Plan
This Plan does not replace the others. The Annual Plan is an operative document, in
the sense that this is the only document which is ratified by Parliament (normally in
the form of an annual capital budget). It is the controlling Plan, which authorises
Ministers to spend money. A Five or Ten Year (medium term) Plan does not
authorise anything, but is merely a statement of intentions.
The Annual Plan is also the controlling Plan because, every year, it should match
resources with achievable performance. The Annual Plan is governed by either the
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5 The Long Term Plan for Infrastructure
plan (the constraints). Thus, in multisectoral planning, we need projections for the
demand of final commodities, sectoral outputs, sectoral investments, other sectoral
inputs, imports, and exports over the period of the plan. Finally, the government
specifies the direct and indirect policy instruments that it intends to utilise to achieve
the sectoral aims of the plan.
Multisectoral planning is essential to ensure the consistency of intersectoral plans
in the economy and to help determine the most productive use of the limited
resources of the developing nation. The consistency of intersectoral flows can be
tested with product and factor balances or more precisely with an input-output table.
The efficiency of sectoral investments can be analysed with more complicated linear
programming models. Linear programming is also a method for calculating the
shadow prices which correspond to the equilibrium conditions and thus correctly
reflect social costs.
5.6.3 The Medium Term Plan
Planning has an important use: decision-makers are forced to stop and think about
the long-range goals, and the immediate actions required to achieve these longer
perspectives.
In the context of a medium term Plan, the general policy guidelines would be as
follows:
1. Determine policy regarding variables which be controlled.
2. Use a proper and adequate forecast estimate.
3. Plan for adequate capacity units (of the upper steps of Fig. 5.2).
4. Avoid under (over)employment by maintaining a more or less stable work force.
5. Monitor stock.
6. Maintain flexibility to address fluctuations in requirements.
7. Respond to demand as per established rules.
8. Assess and monitor the planning at regular intervals.
5.6.4 The Short Term Plan
This Plan does not replace the others. The Annual Plan is an operative document, in
the sense that this is the only document which is ratified by Parliament (normally in
the form of an annual capital budget). It is the controlling Plan, which authorises
Ministers to spend money. A Five or Ten Year (medium term) Plan does not
authorise anything, but is merely a statement of intentions.
The Annual Plan is also the controlling Plan because, every year, it should match
resources with achievable performance. The Annual Plan is governed by either the
150
5 The Long Term Plan for Infrastructure