Physical planning is concerned with the physical allocation of resources on one side and returns this allocation yields on the other side. In other words, it is the physical balance between investment and output. It can be analyzed as what will be the composition of investment required to acquire an increased output. While financial planning is setting an equilibrium between demand and supply so as to avoid inflation and enhance economic stability. While physical planning concentrates on the size of real investment in terms of man power and raw materials, financial planning bothers on the size of the investment in terms of money.
