NOTE 63 \ passenger fares in the railway budget has been heavily loaded against the lower classes. The increase in the fares affecting the upper-class passengers will bring only less than Rs 1 crore, while the increase in the third-class passenger fare will raise an additional amount of 50 crores. The railway budget proposes to collect an additional Rs 190 crores.Of this, over 93 crores will be accounted for by increase in freight on goods traffic. There is a substantial increase in the freight of salt, mustard oil, sugar, coal, firewood, paper and aluminium utensils which enter into the day-to-day consumption of poor workers, peasants and middle classes. Besides, the increase in freight charges on steel, fertilizer, ores and raw cotton are bound to affect the cost of production in farms and factories and upset the family budgets of masses of consumers. For the first time since independence a substantial increase in the burden of indirect taxes is accompanied by a considerable scaling down of the marginal rates of personal income. An interesting feature of the proposed reduction is that the rate of concession is nominal at the lower slabs and substantial at the higher slabs of income. A good part of the excise duties would be passed on to the poor and middle class consumers and the increase in postal rates would also fall mainly on the poor and middle classes of the population. The interests of those who have been dominant in the land and in business have demanded that resources for capital formation should be mobilized by transferring income from the consuming masses to the owners of property partly through the operation of market finances and partly through the fiscal mechanism. Deficit financing and commodity taxation have been the major fiscal instruments through which income is being transferred from the masses of consumers to the saving classes. In general the budget has meant an additional burden of Rs 212 crores on the poor and middle classes while large-scale concessions are given to the rich. This budget is another example of the pauperization of the poor who are victimized by the wrong economic policies of the ruling class. JACOB EAPEN