62 j SOCIAL SCIENTIST integrity among senior officials' (p. 453). e) 'Measures to bring down the amount of black wealth currently held' (pp. 454-458). The conclusions and recommendations which go contrary to some of the research contained in the Report and are not supported by strong counter evidence are: a) The positive relationship between high tax rates and black income generation and the corollary that a reduction in tax rates would cause black income generation to decline, b) High degree of controls and regulations lead to black income generation and a reduction in their intensity or their complexity would lead to the reduction in the size of the black economy, c) The suggestion for relaxation of rent control laws and reduction in Stamp Dudes for reduction of black income generation in real estate. \ There is also a third category of results where errors in calculations or errors in methodology have occurred, thereby putting the results obtained in doubt One may mention amongst the principal ones the methods used to calculate the size of black incomes generated in (a) legal current activities, [see Kumar (1985 c) for detailed arguments], (b) sale and purchase of immovable property in India, (c) sale and purchase of immovable property in Bombay and Madras. Before presenting the detailed arguments^ it would be well to observe that issues related to the rates of taxes or the controls imposed on economic activity have a social basis which cannot be ignored in any discussion on these questions. These issues cannot be viewed narrowly in the context of whether or not they foster the growth of the black economy, admittedly an important social consideration. A discussion of the wider social issues relevant to these questions, like, growth with justice, the need to keep disposable incomes and consumption at low levels to allow Planning a chance, is missing. The view taken in the Report is that if a policy has failed then not only is it necessary to throw it out bur even the objectives to be achieved by the policy become dispensible. Reduction in tax rates The high tax rate hypothesis may be discussed in two parts. First, whether higher tax rates lead to an increased generation of black incomes. Second, whether a cut in a high tax rate would lead to a decline in the generation of black incomes. The research done for the Report, in respect of the sugar industry and real estate, indicates that neither a higher tax rate necessarily leads to a higher quantum of generation of black incomes nor a cut in it reduces the generation of black incomes. In the case of sugar industry a time series of evasion of excise duty has been provided (p.212). However, an explanation of this in terms of changes in excise duties has not been attempted. Rather, evasion has been linked to the possibility of successful evasion and the profits earned by the industry (p.216). The conclusion is that profits are channelled from tlu. public to the private coffers of the managements. For this, the rate of tax or te reduction is not material