Benefits of planned economy | Disadvantages of planned economy

Provision of public goods. Because production is not undertaken for profit, it is generally argued that there is a greater provision of public goods in the state planned economy.
No production and consumption of merit goods. It is the government that plans and controls production. Goods which are harmful to the society can hardly be produced. Hence, demerit goods can hardly be produced and are completely out of consumption.
Equal distribution of wealth and income. In centrally planned economy, there are no private entrepreneurs. This means that it is not possible for any one to earn income from factors of production. Because of this, few people can hardly get very rich while the majority lives in poverty. The government owns all the wealth of the nation and ensures a faire distribution of the citizens.
A more stable economy. Consumers have less power to influence production. This means the production will not change easily because it doesn't depend of the taste of the consumers.
No wasteful competition. Private entrepreneurs are absent hence firms are not involved in wasteful competition. There is no need for competition since all firms are owned by the state.
Increased production and consumption of merit goods. The government can easily divert more resources to the production of merit goods since it owns and have total control over resources. Consumption is high because there are no market prices.

Loss of consumers sovereignty. Production is not influenced by consumers choice but is determined by the state. Consumers do not have the power to influence production and simply consume what the state can provide.
No incentive to innovate. Producers are not encouraged to improve on efficiency because they are not our for profit. This means that they do not have incentive to invent or introduce new products and new techniques for production. There is relatively a slower rate if technological progress.
No freedom of choice. Consumers lack freedom of always choosing what to consume, hence goods that are produced may not always reflect their taste. They simply consume what the state offers.
The production of low quality goods. The absence of competition in this economy gives rise to inefficiency and the production of low quality goods. This disadvantage is also responsible for the low living standards in most state planned economies today. This also makes their exports to be less competitive in foreign markets.
Increased cost to the government. There is high opportunity cost of employing people to gather process information and formulate plans. People who work in the central planning authority (planners) are on state payroll.

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