Physical planning is concerned with the physical allocation of resources on the one side, while with the product yields on the other side. Its aim is to bring a physical balance in between investments and outputs. Accordingly, investment coefficients are computed. These coefficients show how much amount of investment will be required for a given amount of output. Moreover in such planning it is also analyzed that what will be the composition of investment to obtain an increase in output. Ass, how much iron, how much coal, how much oil and how much electricity will be required to produce some specific amount of steel.
Accordingly, in physical planning the planned increase in output of various products is balanced with the amounts and types of investment. In addition to creating a balance in between investments and outputs, it is also necessary to create balance in between various sections of the economy because the output of one branch of the economy serves as an input of some other sector.
While making physical planning, an overall assessment is made regarding the real resources of the economy like raw material and manpower etc. because any impediment or bottleneck in the way of resources availability may put the success of plan into danger.
Accordingly, in physical planning the planned increase in output of various products is balanced with the amounts and types of investment. In addition to creating a balance in between investments and outputs, it is also necessary to create balance in between various sections of the economy because the output of one branch of the economy serves as an input of some other sector.
While making physical planning, an overall assessment is made regarding the real resources of the economy like raw material and manpower etc. because any impediment or bottleneck in the way of resources availability may put the success of plan into danger.