30 SOCIAL SCIENTIST 4. The leading growth sector is however neither agriculture nor industry. It is the services sector, dependent heavily on government outlay in such spheres as defence, public administration and on commercial activities such as banking, insurance, tourism, entertainments, etc. Were we to measure the past decade's growth in terms of expansion of material production alone, it is doubtful whether per capita output has at all advanced. The explosion in service activities also reflects the growing income inequalities in the system. There is no evidence of any significant shift in occupational pattern: two-thirds of our population remain dependent on agriculture and allied activities. 5. It is also necessary to draw attention to the other bizarre fact: a supposedly 5 per cent annual rate of growth in national income has actually been accompanied by a decline in the aggregate rate of savings. Growth has therefore been largely sustained by borrowed external resources, which now represent more than a quarter of the total development outlay. We have deviated to a major extent from our earlier goal of national self-reliance. Perhaps the composition of growth itself has also induced a lowering in the rate of savings. The call has gone out for increased luxury consumption, including the consumption of services; this cannot but erode the ethos of thrift and plain living. 6. The nature and pattern of growth have given rise to a grave crisis in several directions. There is a crisis in employment, a fiscal crisis, and a crisis in the balance of payments. The government's organic inability to even comprehend the gravity of problems afflicting the nation is illustrated by its proffered prescription to cure unemployment. Where a total annual development outlay of Rs. 50,000 crores has failed to create new jobs, it is pretended that an additional expenditure of Rs. 1,000 crores would effect a miracle. 7. A concomitant of the services-and-luxury-consumption-sector-led growth is that direct tax rates had to be pushed down and those comfortably placed to pay taxes offered kid glove treatment. The compulsions of accounting balance have therefore led to increasing dependence on indirect levies (including periodic increases in administered prices) and created money. Both devices push up prices, and thus further shift income distribution in favour of the affluent sections. The implicit logic of the growth model pursued also calls for boosting demand for services and luxury consumption through fiscal manipulations, including large appropriations in the name of defence. Large-scale deficit financing gets built into the arrangements, and prices shoot up. The fiscal crisis, through this process, becomes endemic. 8. Inflation can of course be kept in check up to a point through large imports, but this only makes the crisis in balance of payments even more daunting. Official propaganda cannot really hide the fact that, notwithstanding sweeping dismantling of industrial controls, sustained subsidy schemes and continuous depreciation in the value of the rupee, our exports have kept hovering around 5 to 6 per cent of national income, not substantially higher than the level it had already attained