Credit Planning in the Socialist Economy

The credit plan in all socialist countries has the form of the summarised balance-sheet of all banks and indicates on one side (active) the increase of all kinds of credits to be granted by the banks within the planned period, on the other side (passive) the increase of all monetary means, deposits and the amount of cash in circulation, within the same period. The estimation of the increase in credit must be based on the calculation of the need for credit, emerging from the financial activity of different economic units; the estimation of the monetary resources serving to cover the credit. expansion must be based on the estimation of the increase of monetary savings and reserves made by the same economic units. In general, the need for credit arises when the value of goods and services which have to be appropriated by a certain economic unit (or a group of units in an aggregate plan) exceeds the monetary revenues available for purchase purposes; the formation of monetary savings and reserves occur in the opposite cases. That is why credit planning is possible only within the context of national budgeting, where the allocation of all material goods and services, the formation and the distribution of all monetary revenues are considered.