When in 1959 the USSR government adopted a seven-year plan, the question of the intensification of production was first posed and scientifically substantiated. But he was highlighted much later.
At the end of the seven-year period, the rates of productive growth not only did not increase, but significantly decreased. Return on assets also declined.
In 1964, in March, a new group rose in power. It should be noted that the new political entity (according to some researchers) did not show an active desire to carry out economic transformations in the country. However, not reacting to the situation by that time was simply impossible. The industrial and agricultural issue was particularly acute. In some areas of the state, the lack of food provoked the need to introduce a normalized supply (by coupons) of the population.
In 1965, in March, a Plenum of the Central Committee of the CPSU was held . A new party leader, Brezhnev, made a presentation at it. Leonid Ilyich spoke about the need to take urgent measures to further develop the agricultural industry.
Of course, after the March Plenum, the state’s policy could not change dramatically immediately. However, this period played a significant role in the further economic development of the USSR. So, after the Plenary Session, allocations for rural needs increased, the cost of products sold to the state increased, energy supply increased, and the material and technical base of agriculture improved.
At the September Plenum of the CPSU Central Committee, the government adopted a resolution on making improvements to the management of industry, on developing and improving planning, and on increasing incentives for industry and production. With the adoption of this resolution in the USSR began the economic reform of 1965.
Most researchers associate transformations with the activities of A. N. Kosygin. The September Plenum report included some of the suggestions of E. G. Liberman (a well-known economist).
The economic reform of 1965 was conceived on the model of the system that existed in the country during the NEP. However, a significant difference was that in the 1920s in the economy a significant role was given to private enterprises, which were completely absent in the 60s and 70s.
The economic reform of 1965 in its concept envisaged three directions.
To improve product quality and increase production volumes, it was necessary to increase the material interest of collectives in enterprises. The government intended to carry out appropriate activities.
In addition, the economic reform of 1965 provided for the adoption of certain measures to improve planning. They aimed (measures) to ensure that the adopted plans ensure the proportional development of agricultural sectors and increase the production and technical level.
The third area, which was supposed to concern the economic reform of 1965, was the industrial management system. It was assumed that the existing economic councils would be liquidated and replaced by ministries, which were to become not only all-Union, but also Union-Republican. In this way, uniform technological progress would be ensured.
Economic reform in the USSR was supposed to facilitate the transition from an administrative system of economic management to economic methods.
An important task of the transformation was to increase the operational and economic independence of organizations and enterprises. Reform proclaimed production the main link in the socialist economy.
Thus, enterprises were given unprecedented freedom. From that moment they themselves could plan the pace of development of labor productivity, lowering costs. In addition, enterprises themselves could set the average wage.