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Attempts to reform national economics
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Attempts to reform national economics

Trying to subdue the party and federal bureaucratic apparatus, N.Khrushev attempted to create an alternative structure of executive power with a considerable element of democracy. The substance of the reform was transmittals of industry and construction management from the branch method (through ministries and departments) to the territorial one. In every administrative region a Council of National Economy was set up, obeying directly to the Council of Ministers of the corresponding Union Republic. By that, possibilities of the local party apparatus' interference into the domestic economics narrowed drastically. 105 Councils were created all over the country. 141 ministries were abolished. Production units were given under the control of the new councils.

A number of federal committees were also created (on aerial technics, on automation and mechanical engineering, on radio electronics, on shipbuilding, on chemistry etc.)

From the very beginning administrative reform had a limited character. It didn't bring quality changes into economic conditions of management, planning and was reduced to a formal, structural readjustment of the federal administrative apparatus. The main idea of the reform was "administrative decentralisation".

The reorganisation of administrative system gave a certain impulse to economics development. Rates of National Income growth increased. Process of differentiation and cooperation in the regions deepened, process of the production technical reconstruction fastened. An impressive growth of economising was reached at the cost of administrative apparatus cheapening. But soon the reform began to walk with a limp. Many Councils of National economy were enlarged repeatedly, in the centre multiple branch committees were set up. After Khrushev's dismissal in 1964 the system of territorial administration began to round off and by early 70-s had been terminated.

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