Social Scientist. v 13, no. 151 (Dec 1985) p. 3.


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ASHOK MITRA'"-

Resource Mobilisation And Devolution

ON THE face of it, resources for growth should not, at the present juncture, be wanting in the Indian system. Savings, according to data vetted by the Union government, have currently reached close to 25 per cent of national income. This is not an inconsiderable achievement, particularly in the context of the per capita hie ome level in the country. Something must be at fault if, none the less, puiilu savings are claimed to be in short supply, so much so that important pio;( »is ^ e decided to be cut back. The only possible inferences are that (a) a relatively larger proportion of aggregate savings is being allowed to be cliannelled towards financing private investment, and (b) even within the public sector, a larger proportion of the available resources isj being diverted for defence, para-military outlays and capital formation foi< non-growth purposes.

The most glaring evidence of (a) is provided by the contents of the Union budget for 1985-86. Extensive lowering ^f the directjax burden_has been announced for the corporate sector and individuals belonging to tlie upper income brackets. Realised-and not just realisable-saymgs have thus been allowed to be retained by the private sector, thereby sacrificing the prospect of additional public outlays. The question therefore is not one of availability of savings for public investments, but of the will to pursue such investments. One can certainly discuss-as it is our intention to do so subsequently— measures for generating additional public savings from hitherto untapped sources. But the rationale of choking off the flow of savings from sources which were being tapped in the past should also constitute a part of the agenda for discussion.

This is a crucial issue. For it involves the question of the philosophical format of planning. Do we continue to adhere to the original ideological underpinning of our planning effort, to wit, that tlie State will be the leading sector, both coordinating the mobilisation and deployment of resources as well as monitoring tlieimpac^of other policy nn^asureson^jfrowtH"? It the" decision is otherwiseTthe intention is to switch over to an alternative frame-work\of economic policies, and the task of stimulating tlie processes of growth delegated to private individuals and insmurions, countrymen shouLI be told so. What seems inadmissible is an attempt to shift the onus of a dwm"

"' Economist working with the 1 ell Front Government in West Bengal



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