54 SOCIAL SCIENTIST cent. The 5 per cent growth rate which the Finance Minister has used is in comparison with the bad performance in the base year. If, instead, we use 1978-79 as the base year, the growth rate in the last three years is around 1.2 per cent per annum. In other words, while the rate of deficit financing has been more than twice that envisaged in the plan, growth rate has been less than one-fourth of what was planned. Along with increases in administered prices and indirect taxation the stupendous mobilisation during the last two years has been highly inflationary. One may wonder why then All India Consumer Price Index did not reach double digit figure. The Finance Minister claims that it was due to efficient supply and demand management. It is true that by imposing such enormous burdens on the consumers the domestic demand was severely curtailed. The supply side was managed by running an import surplus of the order of about Rs 5000 crores which was made possible by the IMF loan and remittances from abroad. The absolute number of people below the poverty line is increasing as a result of rising prices and indirect taxes. Erosion of the real incomes of the masses of the population and continued dependence on foreign loans to manage import surpluses cannot be a rational solution to the problem of poverty and development in India. Truncated Plan? The size of the Sixth Plan was finally placed at Rs 97500 crores. The outlay was divided almost equally between the Centre and the States. There was no serious imbalance in the plan outlays of the Centre and States during the first two years of the plan. But, in 1982-83, Central plan outlay was stepped up by 27.7 per cent while that of the States was increased only by 14.4 per cent. In 1983-84, the corresponding increase would be 26 and 16.4 per cent respectively. If this trend continues, the Central plan is likely to be fulfilled in financial terms while there may be a shortfall in the States sector. But this is in financial terms. What will happen to Sixth Plan outlay in real terms? At the end of the two years, the Central Planning Minister candidly acknowledged that the cost of construction had gone up by 20-30 per cent. The sharp increases in the administered prices of investment goods like steel, coking coal, cement, oil etc, along with increasing rates of transport, power and other infrastructural facilities, have pushed up the costs of construction and operation of a wide range of developmental programmes. In fact the prices of investment goods have increased much faster than consumer prices. This would imply that, in real terms, even Central plan outlay would fall far short of what was envisaged in the plan. The shortfall may be of the order of 40 per cent. State governments are unable to raise more resources on their own. Central assistance to State plans is