CURRENT INFLATION IN INDIA 41 represents a shift of the fall that might have occurred in March to October. If this line of reasoning has any validity, then we cannot talk of ^turning corners^. Perhaps the threat of MISA may have precipitated some dehoarding, but the vacuity of this threat is evident from the fact that silver prices have begun to revive again. If the current stabilization, especially for wheat, is a postponed seasonal phenomenon the picture may look something like the following: rice prices, given the drought especially, will pick up from around January, wheat prices after stabilizing for some time may possibly even show the usual seasonal fall after February, and finally pick up from June onwards. Since our argument implies that long-term expectations regarding price movements are likely to be unaffected by the current price stabilization, a resumption of sharp inflation during the calendar year 1975 appears more than plausible. (The author wishes to thank Ashok Mitra, Anjan Mukherjee, Amit Bhaduri and above all S K Raofor helpful'discussion.) 1 See my "Disproportionality Crises and Cyclical Growth5', Economic and Political Weekly, Annual Number 1972. See also section V. 2 On this, see M Kalecki, Theory of Economic Dynamics, Unwin. 9 Note in this connection the following statement in the Economic Survey 1973 : "However prices of certain products, such as cotton textiles, rose much faster than justified by an increase in input costs, indicating that producers took full advantage of the buoyant demand by raising prices/' (p 21)' The survey however gives no evidence to show this buoyancy of demand. The increased mark-up hypothesis may provide a better clue to the behaviour of manufacturers. 4 As the Economic Survey rightly remarks: ^The group of manufactures played a secondary role, both in 1972 and 1973, although, in the latter year, prices of manufactured goods rose much faster than in 1972" (p 19). 5 See Economic Survey 1972-3, Ch 1 and Economic Survey 1973-4, Ch 4. ^ S K Rao and P Patnaik, "Some Aspects of Agricultural Development in Post-independence India^, unpublished. 7 The Economic Survey 1972-73 states: "Moreover an analysis of the bumper foodgrains production in 1970-71 indicates that the growth of output in that year contained a substantial fortuitous element^5, (p 14). 8 This fact however is recognized in the Economic Survey 1972-73, Ch 1. 9 Not only was there no shortage of industrial inputs emanating from agriculture in 1973, but the index of industrial production showed virtually no growth in 1973 over the 1972 level. 10 The Rabi Crash Programme under the Central Plan Schemes accounted for Rs 147 crores or about 11 per cent of the total increase in the combined disbursements of Central and state governments over the previous year; see Report on Currency and Finance 1972-3, p 144. 11 This is the argument put forward in the Economic Survey 1972-3, Ch 1. 12 KN Raj, "Price Behaviour of Foodgrains in India 1951-64; An Explanatory Hypothesis", Indian Economic Review, 1966. 18 Ashok Mitra, "Stabilization, Planning and Growth: Some Preliminary Notes'^, unpublished 14 Raj, op. cit. 18 Francinc R Frankel, India's Green Revolution, Princeton 1971.