WORLD CAPITALIST CRISIS 25 foreign debts. Now we are witnessing the beginning of a recession in India partly due to the slump in the world market and partly due to the loss of purchasing power by the people. One of the first commodities to be affected is raw silk. In the third week of October, newspapers reported that the fall in the market price of raw silk in the last few days had been of the order of Rs 65 per kg. for the highest grade as against the average pre-slump price of about Rs 345! The slump in prices is officially attributed to sympathetic reaction of the local market following the fall in the prices in the international silk markets. The other main reason was the credit squeeze by banks in respect of silk dealers resulting in a glut in the cocoon market as there was no offtake from the dealers. Recession Syndrome in Industry The textile industry has also been hit by the recession. The Ahmedabad mills closed their night shift throwing out four to five thousand workers because of accumulation of stocks. The Buckingham and Car-natic Mills announced their intention to reduce production by 25 per cent because of the failure on the part of the retailers to lift stocks. While Ahmedabad mills had piled up different varieties of cloth, factories in south India reported accumulation of about 90 days'stock of yarn. Apart from the incapacity of the people to purchase cloth at these high prices, the credit squeeze—one of the so-called anti-inflationary measures of the government—has adversely operated in this sector and made it difficult for stocks to move. According to the Indian Cotton Mills Federation, the delegation of the textile industry which met the Deputy Governor of the Reserve Bank of India in October expressed the fear that a situation is fast developing in which fully solvent mills with large reserves would be forced to curtail or stop their operations merely for lack of accommodation from banks to pay wages and to buy the minimum requirements of raw materials and stores. While the mills have reluctantly agreed to reduce cloth prices from 25 to 40 per cent and resumed the third shift in Ahmedabad and the south Indian mills have also proposed to offer the accumulated yarn at 25 per cent lower prices to the handloom sector, the delegation stated, "the fact is that due to dramatic changes that have occurred in the credit situation and the market psychology, there is lack of confidence as also of finances with trade both of which are necessary for the buying to start." Recession is also threatening the steel industry the products of which have been in short supply. Iron and Steel Controller, T Ghosh, stated in Bangalore on October 21, that the Centre might have to think of decontrol or partial decontrol within two or three months. He stated, "from all indications, people do not come to us for steel. When we make allocations, they are not lifted. In the light of these indications, the position of the steel sector is alarming." Ghosh stated that the credit squeeze has