Definition of Economic Planning:

Economic Planning is an effective modern device for the economies are completely based on planning, while in free economics and particularly in the newly-independent developing countries, the device of economic planning is becoming increasingly popular. Economists have given various definitions of Economic Planning:

In Dickinson’s words:

“Economic Planning implies taking major economic decisions as to what things to produce, in what quantity and for whom. These decisions should be based on a comprehensive survey of the economic system and should have been taken by a fixed body.”

Lewis Lorvin has defined economic planning as follows:

“Planning is a device of the economic organization in which individual enterprise and industries are considered integrated units of a single system. Its purpose is to utilise all means and resourees to provide material for maximum satisfaction of the needs of the people over a fixed period.”

(ii) Prerequisites of Plannin2:

In the light of the above-mentioned definitions the following are the prerequisites of planning:,

  1. Complete survey of known and potential resources.
  2. Enthusiasm among the planners and the public to utilisethese resources of economic development.Fixing of desirable economic and social objectives.A central organisation or body to control the planning system according to a well-considered programme.

    (iii) Islam and Plannin2: Islam is a complete code of life, all units of which form an organic whole. It has been formulated by a Master Mind on a just and balanced scale in all spheres. There is no loophole or imbalance in the creation of the earth and the sky.

    [Al-Mulk : 3]

    The sun, the moon, the stars, everything is a model of discipline. The Divine has created the same order in His Religion al-Islam. Islam offers I balanced code of life free of all excess or deficiency. As in other aspects of human life, so in the economic sphere also the favours moderation. He exhorts care and circumspection in the consumption and use of the means of life and has made it obligatory upon people to stop their wastage so that the needs of the people may be supplied to the maximum extent. The spirit of planning also requires the elimination of wastage of resources so that they may be fully utilised to meet the needs of the people. Economic planning is supervised by an external central body while an internal superintendent in the form of soul or conscienc:, has been appointed by Islam in every man which restrains from immoderate behaviour and always reminds him of Allah’s reckoning for unfair use of His bounties.


    (iv)      Planning and Spending of Wealth:

    Islam desires to regulate the spending of wealth so as to make possible maximum utilisation of resources. Islam forbids the people to keep their resources idle or squander them in unlawful ways and induces them to spend the resources for meeting their genuine needs. This basically is the reason why Islam condemns immoderate spending and stinginess. The Planning Commission of an Islamic State is authorised to take necessary steps to check immoderate spending.

    (v)        Economic Planning and Production of Wealth:

    In the sector of production of wealth, economy may be safeguarded from overproduction or under-production through planning. In this way economy may be stabilised by eliminating trade cycles. For this purpose it is necessary for individuals to keep their production activities under moderate limits. Islam wishes to inculcate and nurture such spirit and confidence in the produces tha they should neither indulge in immoderate production in their greed for profit nor impelled by some unknown fear halt the process of production.

    (vi)      Planning and Exchange of Wealth:

    To achieve economic stability and safeguard public interest it is absolutely necessary to impose proper rules and regulations on the exchange of wealth. All forms of causing harm, playing fraud, committing injustice or oppression should be eliminated from business deals. So that the public may continue to obtain goods and services on equitable basis. The eradication of monopolies is another step in this direction. Islam presents a detailed code of rules.

    Business malpractices and crimes in deals can be controlled by implementing this code.

    (vii)  Planning and Distribution of Wealth:

    Islam has taken effective steps to regulate the system of distribution of wealth on an equitable basis, to increase the circulation of wealth and to stop the accumulation of wealth. In order to transfer wealth from the rich to the poor Islam, besides giving moral instructions, enacts laws of Zakat, Sadaqat and distribution of inheritance. Furthermore, the Islamic gtate is authorised to use administrative powers to remove inequalities in incomes. In this connection planning in the collection and distribution of Zakat can on the one hand eradicate poverty and unemployment and on the other save the economy from the vicious circle of trade crises by strengthening the purchasing power of the people

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