POVERTY & EMPLOYMENT ^7 idea ot the minuscule nature of outlays on employment generation so far may be had from the fact that annual export subsidies to a handful of enterprises alone exceeds five times over the annual outlays ofNREP, supposed to benefit a population of 400 lakh households. While the Seventh Plan outlays have not been finalised at the time of writing, it is estimated that the minimum funds required for maintaining IRDP alone at the existing level taking into account inflation and leakages would be of the order ofRs. 5000 crores; while if the scope of the programmes is to be widened the resources required would be correspondingly larger. Similarly the maintenance ofNREP, RLEGP (as well as TRYSEM) at even the existing levels in terms of person-days of employment generated, would entail a stepping-up of money outlays yielding a minimum grand total of the order of Rs. 8000 to Rs. 10000 crores over the Seventh Plan period.' The prospects for the expansion and even the maintenance in real terms of the present employment generating programmes, minuscule as they are, appear to be bleak in the light of the resource-crisis of the State which is beginning to manifest itself with the emergence of the *new economic policy* whose main contours are becoming clearer over time. If the 1985 Budget, the measures ofdelicensing and import liberalisation and the new textile policy are all considered together, the conclusion becomes inescapable that the Government has opted for and is quite consistently implementing a policy of promoting a profit-inflation for private enterprise on the none-too-valid assumption that this will provide the main engine of accumulation and growth. Rates of corporate and individual direct taxation have been slashed in the 1985 Budget, the ceiling on assets for defining a monopoly under MRTP raised five times over, while simultaneously, import-liberalisation and capacity delicensing combined with an open-door policy to foreign capital entering collaboration agreements, comprise a package designed to allow industry to invest without hindrance in the high-profit areas. These expanding-demand and high-profit areas today are constituted by the commodities demanded by the top two deciles of the Indian population ranked by expenditure on consumption. At the same time, the resource-squeeze faced by the State, arising from the slashing of direct tax revenues and the continuing large subsidies (to industry, on food and fertilizers), can only par-dy be countered by widening the scope of indirect taxation, since this already provides 85 per cent of tax revenues. Recourse is therefore tAen to increased i credit-financing, of which deficit financing in the narrow sense forms only a part.2 We will return to the question of credit financing later. The inevitably rapid-rate of inflation which will follow the expansion of credit financing (and which has begun already) is likely to worsen the real income position of the rural and urban poor furthfer; while at the same time the mobilisation of resources for alleviating poverty becomes more ditticuu precisely in consequence of the fiscal measures under the "new economic policy'. The somewhat contemptuous relegation of the employment generation and poverty alleviation programmes to a low-priority, low-outlay position in