128 - SOCIAL SCIENTIST • and kerosene—-are in the public sector. The government-owned textile mills have huge Unutilised capacity, while the handloom industries can also be mobilised. Edible oil can easily be procured by imposing a levy on edible oil production. 4.2 There has to be a large scale mopping up of liquidity in the economy through greatly enhanced direct tax revenue?, generated by increasing both the rates as well as the collection of these taxes. It is a crying shame that in an underdeveloped country like ours the revenue from direct taxes is less than a miniscule three per cent of the GNP. 4.2.1 The black economy in the country, even by the most conservative estimates, accounts for about 20 per cent of GNP. A part of this consists of wage income, but a large share is comprised of profit and rent incomes. Even assuming that a third of the income generated in the black economy is taxed away, this alone would give an additional tax revenue ofRs 10,000 crore per annum at present. Even if this level of collection were not to be possible, if we take account of the extra revenue that could be generated through additional direct taxation of the non-black sector of the economy, it is clear that the fiscal requirements of the above programme of employment generation can be easily met. Of particular relevance here, is the issue of direct taxation of agricultural incomes. Appropriate legislation should be drawn up which brings the incomes of the rural rich under the ambit of direct taxation. On the basis of a very conservative assessment the agriculture could contribute at least one per cent of its share ofGD)P in the form of direct taxes, at least Rs 700 crore of additional tax revenue could thus easily be raised. 4.3 The employment generation programme must consist of productive projects which themselves enlarge the stream of output especially of mass consumption goods over time. This ought to include rural housing activity based as far as possible on the utilisation of local skills and material, besides soil improvement and other public works. 4.4 Clearly the selection, administration and monitoring of such an employment generating project is a complex task. Such programmes hitherto have not only been on a meagre scale but have served to a large extent as a conduit for the transfer of public funds to the pockets of contractors and rural rich. This can only be prevented by associating the beneficiaries in an organised manner with the running of such programmes. In the countryside this would require a strengthening of the democratic institutions like the panchayats and organisations of the poor, like the agricultural labour unions, kisan organisations and so on. Also a degree of devolution of planning, along with a strengthening .of the planning machinery should take place in the country. A curbing of the power, economic, social and political, of vested interests is essential. In order to achieve the latter, there should be thorough-going land reforms and implementation of policies aimed at protecting and strengthening the poor peasants in the countryside. 4.4.1 Legislation needs to be introduced to ensure that indebtedness of he peasants to banks and other financial institutions does not lead to attach-