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What Is Meant By Corrective And Development Planning?

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Muhammad Abdullah786 Profile
The capitalistic economies have to face a lot of un-adjustments like inflation, unemployment, budget deficits and deficit in the balance of payments etc. therefore, to remove these bottlenecks and imbalances, the governments have to make planning. In this connection, government relies upon certain fiscal and monetary devices as well as direct actions.

Thus, the planning consisting of fiscal and monetary measures with the aim of removing the imbalances of the economy is known as corrective planning. As to control inflation, if government follows a strict fiscal and monetary package; controls aggregate demand by checking consumption, investment and government expenditures this will be the case of corrective planning.

Again to remove unemployment, if government pursues easy fiscal and monetary policies; deficit budgets are made; and aggregate demand is increased this will also be the case of corrective planning. Furthermore, if in an economy to reduce income disparities the rich are taxed heavily and the poor are subsidized this will be also an example of corrective planning.

Most of the capitalist countries which have entered in the mature stage of economic growth depend upon corrective type of planning. Developmental planning is of greater importance for the developing countries. Therefore, the developing countries are highly imbued to develop their economies by removing social, political and economic obstacles.

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