Q.What is meant by Planning by Direction ?

Planning by direction is centralised, command-style planning in which one authority directs all production and allocation of resources.

• Meaning: Planning by direction is an integral part of a socialist/centralised economy. Under it there is one central planning authority that plans, directs, orders and controls all economic activities in accordance with a single overall plan.
• Features: the central authority decides what to produce, how much to produce, the techniques to use, and how resources and products are to be allocated; individuals and firms must obey these directions.
• Merits: it allows rapid, coordinated mobilisation of resources toward national priorities and avoids duplication and waste.
• Demerits: it curbs individual freedom and consumer choice, needs a huge bureaucracy, and can be inefficient due to lack of incentives. …