ey must
take into account the economic tasks set for that year by the five-year
plan. The central planning authorities formulate the ultimate annual
plan by modifying individual contracts, where deemed necessary, in the
light of official policies and anticipated availabilities of materials
and other inputs. Correction of original contracts was reported to be
essential because enterprises tended to exaggerate their true
requirements as determined by official norms and standards. In 1970
initial orders exceeded available resources of materials by from 20 to
200 percent.

In 1970 and 1971 a large number of inter-enterprise contracts were not
concluded on time and, despite legal provisions for financial and other
sanctions, thousands of contracts were not adhered to. This entailed a
disruption of supplies and production, nonfulfillment of export
obligations, and insufficient deliveries to the domestic market. In an
attempt to cope with the supply problem, the Ministry of
Technical-Material Supply and Control of the Management of Fixed Assets
was created in September 1971--yet another example of trying to solve
economic problems by administrative means.

The final stage in the planning process, as in the past, continues to be
the assignment to each enterprise of specific tasks bearing on all
aspects of its operations. These tasks, generally known as plan
indicators, spell out in minute detail such items as the production and
investment program, the size of the labor force and the wage bill, costs
of production, and profits. They also specify norms for the use of all
materials, equipment, and labor and set goals for raising productivity.
In the case of large enterprises the number of indicators runs into the
thousands. The indicators are also used to evaluate the performance of
enterprises in relation to the plan. The entire process has been said to
represent the application of democratic centralism to planning.

The number and type of indicators to be assigned to enterprises and
their associations and the nature of the system of indicators best
suited to stimulate greater efficiency and technological innovation have
been subjects of wide-ranging and intensive debates. No clarification of
the underlying issues, however, much less a consensus on appropriate
measures to be undertaken, had emerged by early 1972. Officials have
ascribed the lack of any significant progress in the planning reform to
general inertia, organizatio