Techpromfinplan

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TECHPROMFINPLAN

In the final stage of the annual central planning process, Soviet enterprises received each year a comprehensive document, the techpromfinplan (technical-industrial-financial plan), which they were required by law to fulfill. Divided into quarterly and monthly subplans, the techpromfinplan governed the operation of the firm by specifying output targets and input allocations, as well as a large number of financial characteristics, delivery schedules, capacity utilization norms, labor staffing instructions, planned increases in labor productivity, and other targets. In total, as many as one hundred targets were specified in the techpromfinplan, the most important of which involved output targets. Fulfilling output targets, measured either in quantity or value, formed the basis for calculating bonus payments for managers and workers.

In a very broad sense, the techpromfinplan was the means by which Soviet planners' preferences were implemented. Social and economic goals set at the highest level of the political bureaucracy and conveyed to Gosplan, the State Planning Committee, were disaggregated by sector, region, and industry, and sent to individual firms. More narrowly, the techpromfinplan specified the scope of the firm's operations for the year.

The production component of the annual enterprise plan identified the quantity, ruble value (valovaia produktsia ), and commodity assortment of output to be produced. Input allocations, supply schedules, capacity and resource utilization norms, as well as other technical indicators, were devised to support the firm's ability to fulfill the production targets. Current production targets were typically based on a percentage increase in the firm's past performance, adjusted for quality-improvement targets. The process of planning from the achieved level meant that Soviet enterprises were subject to a "ratchet effect" in terms of quantity targets.

The financial component of the enterprise plan consisted of profitability norms, planned cost reductions, credit plans for purchasing inputs, a wage bill, and other financial indicators. The comprehensive nature of the financial plan paralleled the production plan, allowing planners to monitor the firm's monthly and quarterly output performance. Moreover, through the financial plan, ministerial officials exercised ruble control (kontrol' rublem ) over the enterprise by restricting access to financial resources, as well as by redistributing profits. Unlike managers of firms in market economies, however, whose performance is measured in terms of financial indicators, Soviet managers placed highest priority on fulfilling the production plan targets.

In addition to production, financial, and distribution components, the techpromfinplan also specified a variety of labor staffing targets, including the distribution of labor force by wage classifications, the total amount of wages that the firm could pay, average wages by occupational category, and planned increases in labor productivity, but left the manager with some discretion over staffing issues within these constraints.

Legally obligated to fulfill the techpromfinplan and motivated by large monetary bonuses paid for fulfilling output targets, Soviet enterprise managers nonetheless exhibited a significant degree of flexibility in both the production and distribution activities of the firm.

See also: central planning; planners preferences