1883-84 BUDGET 51
Based on the point to point increase of 3 per cent in the general price index, the Finance Minister has claimed to have achieved price stability in the economy. This is misleading. The consumers are more concerned about articles of common consumption. In fact, the increases in wholesale prices of food articles have been much higher than the increase in the index of wholesale prices. The prices of cereals have gone up by 8 per cent, that of pulses by 10.9 per cent, that of eggs, meat and fish by 18.6 per cent and that of edible oils by about 15 per cent. These are the articles which figure prominently in the family budgets of the masses of the consumers.
What as therefore more relevant is the index of consumer prices which, at the all-India level, has gone up by 8 per cent which is by no means small. Despite the element of underestimation involved, the cost of living indices of working classes have shown a continuous incresse over the years. Even in terms of the All-India Consumer Price Index, there has been an increase of 38 per cent over 1980-1983. This is an index of the erosion of the purchasing power of the consumers amongst the masses of the peasantry and unorganised workers in the agricultural and industrial sectors. It is thus obvious that productive forces cannot be stimulated by pauperising the masses of workers and peasants.
Increases in Administered Prices
Inflationary trends are attributable to increases in administered prices, reliance on indirect taxation and deficit financing of an order which increases in supply do not warrant. The performance of public sector undertakings has been far from satisfactory. Inadequate demand, indiscriminate imports, introduction of labour-displacing technologies and inefficient operations have been the root cause of substantial excess capacity in a wide spectrum of industries in the public and private sectors. Expansion of domestic market by a rapid increase in the employment and real incomes of the work force is the key to the utilisation of capacities in interrelated industries. Instead of removing these constraints the government has resorted a steep increase in administered prices of several consumer and intermediate goods. This is, of course, in conformity with one of the conditionali-ties conceded by the government to the IMP
Consequently, the administered prices of coal, oil, steel, aluminium etc were stepped up on the eve of the 1982-83 budget. The amount of mobilisation involved was about Rs 1300 crores. Passenger and freight rates along with postal and telephone tariffs were also increased to yield about Rs 700 crores. The budget for 1982-83 introduced dual pricing in cement. It is obvious that price increase of kerosene, coal as well as hikes in passenger fares, freight rates and postal tariff affect consumer prices directly. As for the increases in the price of intermediate and investment goods, a cumulative