Social Scientist. v 11, no. 119 (April 1983) p. 50.

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1983-84 Budget—A Blow to the Productive Forces

WHILE presenting his budget proposals in Parliament, the Finance Minister claimed that the philosophy of his budget was to strengthen "the productive forces in the economy". One would have thought that the Finance Minister was going to unfold a package of reliefs and incentives to the masses of workers and peasants who constitute the most creative productive forces in the economy. It is well-known that the productive potential of the peasantry cannot be unleashed unless land belongs to the actual tillers of the soil, remunerative prices are offered to agricultural produce and the real wages of agricultural workers are raised. In the same way, excess capacity in industry cannot be eliminated unless the workers have a stake in increased productivity. Increasing the real wages of workers and their active involvement in production management are crucial to any substantial increase in industrial production. It is the workers and peasants along with the lower and middle class employees who constitute the major segment of buyers of what is produced for the domestic market. Instead of strengthening the real incomes of the workers, peasants and middle class employees who constitute the bulk of the productive forces, the Finance Minister has set out to stimulate a small stratum of savers in the upper income brackets and corporate investors who have all along been the major beneficiaries of fiscal inducements and developmental programmes.

What is worse is that instead of protecting and raising the real incomes of the masses of workers, peasants and middle class employees, the Finance Minister has relied on indirect taxes, inflationary financing and enhancement of administered prices envisaged within and outside the budget which would further erode the purchasing power of the masses of the consumers and defeat the end objective of stimulating domestic savings and investment. Promoting export in the prevailing climate of deepening recession and rising tide of protectionism in the developed capitalist countries will also be self-defeating. Thus, the philosophy of stimulating productive forces and the manner .in which it is sought to be clothed by the budget proposals are extremely lopsided and disappointing.

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