REPORT 63 months. It must also be noted that in recent years the relative growth rate of essential consumer goods was much lower than that of luxury goods. Thus, we find that there has been an all-round decline in production,almost nearing a point of total stagnation. What is more distressing is that such abysmally low rates of growth were recorded despite various "crash programmes'5 to stimulate agricultural production and addition to capital creation. Growing Inequality Stagnation is also accompanied by increasing inequalities in income and wealth. In the absence of data on income distribution, it is not possible to show in definite terms the extent of increase in favour of the higher income strata during the inflationary situation. One study, however, shows that the share of the bottom two deciles for the rural areas has fallen from 5.9 per cent in 1962 to 4.8 per cent in 1968, whereas the share of the top two deciles has gone up from 48.0 per cent to 53.0 per cent during the corresponding years. It should, however, be borne in mind that this widening gap between the top and bottom classes was noticed over a period which was not characterized by the type of galloping inflation witnessed during the last two years. The severity of the effect of inflation can more clearly be seen in the light of differential price intensity adversely affecting the masses of ^ poor. For example, the cost of living index for the bottom decile of the rural population has gone up to 350 in 1973-74 (with 1952-53 as the base year) whereas the index was less by 52 points for the top 10 per cent. The picture was still worse in the case of the urban population: the index moved up to 384 for the bottom decile class as compared to 290 for the top ten per cent, a difference of 84 points. It is also interesting to note from official figures that between 1959 and 1966, while the ex-factory value of the output increased by 168 per cent, employment in absolute terms increased only by 37 per cent. While the value of output per person increased by 95 per cent, wages, salaries and other benefits per person increased only by 65 per cent. Surplus value appropriated by a minority group of property owners increased from 42.3 per cent of the value added in 1959 to 45.5 per cent in 1966. It, therefore, follows that inflation has ushered in a type of income distribution which has favoured those, like traders, producers and their associates whose collaboration with the system is direct. Landless agricultural labourers and rural artisans, the very small cultivators and tenants, the tribaL and scheduled castes; large number of urban labour, casual and unorganized workers in particular, and salaried middle income earners are among the vulnerable sections who suffered a relative setback. Regional Imbalances A measure of the growing inter-reglonal imbalances is the difference in the per capita income in the richest and the poorest states in