The advantages and disadvantages of rolling plans are discuss under the following heads :
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Advantages :
The concept of rolling plan has generated a lot of controversy. Nevertheless, there are certain advantages which are claimed in its favour.
(1) Flexibility :
The methodology of rolling plan enjoys the advantages of flexibility. In a rolling plan necessary changes can be brought about in the targets and priorities of the plan in accordance with the changing situations. Constant revision of priorities, perspectives and projections impart flexibility to the plan. According to Prof. Raj Krishna, “there would be flexibility in the rolling plan which would take into account the increasing uncertainties and the greater demand for allocations.” A rigidly fixed plan precludes learning from experience.
(2) Continuity :
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Economic development is a continuous process. Planning helps us in achieving the objective of quick economic progress. Continuity is the very essence of planning. It is contended that the sense of continuity is weakened, if not lost, when planning is divided into fixed five-year periods. True planning requires that “even when drawn up for a given time span, the plan should provide for smooth succession of new starts.” A rolling plan involves continuous exercise in the form of revision and renewal.
(3) Reality :
A fixed plan is unrealistic by nature. It is also because it has no built-in mechanism to adapt itself to unforeseen circumstances. But in a rolling plan revisions and adjustments can be made in accordance with the performance of the various sectors of the economy. This will impart realism in planning by reducing the gap between targets and performance.
(4) Relevance for an underdeveloped economy :
The concept of rolling plan has great relevance for a developing economy. For instance, India has undertaken five five-year plans and three annual plans. India is still plagued by massive poverty, spiralling prices and mounting unemployment. There is a big gap between the targets and achievements, between plan and performance. This has rudely shaken people’s faith in development planning. Rolling plan is expected to improve the performance of planning.
Dr. D.T. Lakdawala has elaborated the process “the concept of Rolling Plan demands that every year the achievements of the plan should be viewed against the targets. It, therefore, implies that the five-year plan should be broken into five annual savings, investment and production targets, so that the progress of the year can b« measured against expectations. If there is a shortfall steps will immediately be taken to speed up performance.”
Disadvantages :
The technique of rolling plan has come under severe criticism from different quarters. Some of the important criticisms of the concept of rolling plan are discussed below:
(1) Lacks commitment :
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In a fixed, time-bound plan there is an element of sanctity. Once the targets are fixed an all-out effort is made to implement the programmes sincerely, so that perceptible results could be achieved within five years. It naturally calls for commitment from the planning authorities. But once constant changes are introduced in the planning process, very little enthusiasm and commitment will be left for planners. Such rolling plans thus are likely to suffer from the lack of seriousness and sincerity.
(2) Creates certainty :
Stability and certainty are the crucial pre-requisites of successful planning. Planning is a long drawn-out process necessitating a certain degree of stability for the success of long-term investment. But a rolling plan may give rise to uncertainties, due to constant no revision in projections and targets. The private sector is often ignorant of the likely revisions in the plan. The planning authorities also are not very sure of the responses of the private sector to any plan alteration. The entrepreneurs and general pubic may fail to react in the manner desired by the planner. This element of uncertainty may prove detrimental to economic growth.
(3) Weak discipline:
The successful implementation of any plan pit supposes disciplined effort In case of a rolling plan there will be no fixed targets to be realised within a fixed time. Any adjustment of overall output and investment targets most likely would be in a downward direction. So adequate efforts may not be forthcoming on the part of the planners. There may be laxity among the various plan implementation
(4) Difficult to prepare :
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Preparation of the plan documents itself is a gigantic task. When this document has to be revised and reviewed annually, it will make the job still more hazardous. Preparation of the tolling plans would necessitate adequate statistical information in respect of different plan projects. These informations have to be properly analyzed and monitored. To perform this huge task creditably and efficiently, there must be an effective and competent agency to organize information. It requires a high degree of technical sophistication. In most of the underdeveloped countries the information processing or monitoring agency is not efficient enough to formulate and implement rolling plans.
(5) Centre-State mistrust :
In a federal set-up like that of India,rolling plans may give rise to Centre-State misunderstanding. In India,for instance, central assistance plays an important part in financing the plan expenditure of the States. It is feared that after the introduction of the rolling plans, the Centre may not make long-term financial commitments at all or such commitments may be made less firmly than before. This might introduce an element of uncertainty in State plans. Ultimately this may be harmful for a federal structure.