Corporate Planning in the Context of National Planning

The concept of a mixed economy, as practised in India, by its very definition limits the area of operations of the private sector. But the national plan, viewing the economy as a whole both from the short run and the long run point of view indicates the appropriate fields of development for the firms in the private sector as well. Depending on the vigour with which the policy instruments are sued, these indications can become much more than mere expectations. However, the targets set in any plan for the various industries and sectors must be treated with some circumspection. This caution applies as much to industries in the public sector as they are to those in private sector. First of all the targets set for various industry groupings are highly aggregative and therefore must be broken into productwise demand. Second, the implications of the physical targets laid down in the plan need to be translated into economic and financial terms to determine the profitability or otherwise of entering a particular field. Finally, the targets set for the various industries are highly interdependent and shortfalls in the output of some of the crucial sectors can completely upset the targets set for most of the industries. Our past plan experience quite clearly warns us to be on the guard on this score. It is only legitimate that a corporate planner should treat the national plan as given and make his own schemes of expansion in that context. But at the same time, it is important for him to understand the strategy and assumptions underlying the national plan because that will enable him to quickly reassess the segment of the plan he is interested in, if some of the underlying assumptions go wrong. In this he might be even a few steps ahead of the national planners, if he is perceptive enough Without doubt, the plan provides the broad framework within which the corporate planner can draw his own plans. But in so doing he cannot escape from making his own judgment on the key assumptions of the plan.