Material Balances

a system of indexes in which the resources of a particular product and the need for it are juxtaposed. Material balances are used to determine the degree to which production is supplied with the corresponding types of materials and to establish correct proportions in the national economy. There are three kinds of material balances: national, territorial, and particular.

The national balances compare resources and needs for particular types of output for the Soviet economy as a whole. The development of such balances ensures coordination of needs and resources at a particular stage of national economic development and identifies new resources and internal reserves that can be brought into economic circulation. Additionally, strict economy in the use of material resources is promoted, partial disproportions in the development of sectors can be uncovered and eliminated, and the comprehensive development of the economies of the Union republics and economic regions and the accumulation of state reserves are fostered. National balances cover only those types of industrial and agricultural output that are essential to accomplishment of the most important tasks of the plan. For example, planned material balances are worked out for rolled ferrous metal products, the principal nonferrous metals, coal, petroleum products, the chief types of machinery and equipment, electrical energy, the most important chemicals, lumber and building materials, manufactures and foodstuffs, and agricultural raw materials. The material balances are the basis for the production program of the national economic plan, the plans for the distribution of industrial and agricultural output and raw materials among users, and the plans for commodity turnover.

National balances are developed by central planning bodies according to the categories shown in Table 1.

Territorial material balances are developed for Union republics, economic regions, krais, and oblasts, as well as for particular types of products and for production and consumption zones

(balances of coal by coal basins, balances of electrical energy by energy systems).

The material balances of the Union republics include the main indexes shown in Table 2.

The material balances of the Union republics are used to establish proportions in the development of particular industrial and agricultural sectors in the republic, taking into account the need to satisfy both national needs and the needs of the particular republic.

The particular material balances are drawn up for grades and sections of metal, for grades and brands of coal, and so on.

All the most important material balances are expressed in summary form in two variations of the intersectorial balance: that is, in cost and physical terms.

Balances are worked out using all the methods employed in national economic planning (economic analysis, technical-economic calculations, and balance and mathematical economic methods). The balance method is the most important. The basis of all balance designs is this equation: inventories at the beginning of the period plus receipts of resources are equal to inventories at the end plus expenditures during the period. The internal unity and interdependence of all elements of social production manifests itself in this relationship. The most important and most difficult task is to achieve an optimal structure of resources and their use to ensure a rise in the efficiency of social production under the actual conditions.

The resources received from production are determined according to the production program, whereas resources received from imports are determined on the basis of the export-import plan, and inventories held by suppliers at the beginning of the year are determined by calculation on the basis of current statistical data. The balance identifies all sources of supply, with the apportionment of the chief suppliers.

The calculation of the need for a particular type of output is based on the indexes of the corresponding program for development of the sector (region, association, enterprises, or nonproduction institutions), on progressive norms for input of materials per unit of output or unit of work, and on planned volume of commodity stocks and norms of equipment use. Incomplete (in-process) production is considered in addition to the output planned for production in determining the need for material resources.

The coordination during the planning period of output resources with the needs being satisfied implies a search for additional sources for growth in production; such growth may come through fuller use of production capacities, increases in labor productivity, mobilization of internal reserves, the technically and economically sound reduction in specific expenditures of material resources, or substitution of less scarce types of output for more scarce types. The methods of determining the need for the means of production differ at different levels of planning. For the lower levels the direct calculation of the need for production of output or work on the basis of specific, detailed norms is more important. At the level of statewide planning, calculations of need are based on consolidated planning norms.

From an economic point of view the most important balances in the material balance system are the balances of metals, equipment and machinery, fuel, electrical energy, agricultural raw materials for processing, and consumer goods.