FISCAL POLICIES AND INFLATION 55 availability and organizational capabilities. Biting more than what could be chewed results in delayed action and indigestion. The number of false or half starts or miscarriages increases with every successive election at the national, state and local levels. When empty slogans and promises fail to impress upon the electorate more and more abortive investments are undertaken to cover up the dismal failures in the past. Apart from misdirection and waste of real resources, such irresponsibility and irrationality on the part of political executives have played havoc with completion schedules leading to long delays in the supply of investment and intermediate goods and services essential for the full utilization of the productive capacities in the system. Fiscal Prudence In this context, the Keynesian remedy of slashing public expen-dtiture does not solve the problem. In fact, cutting down the rate of investment or toning down the heavy investment bias will only impair the long term objective of balanced development. On the other hand, a prudent development strategy would call for a considerable step-up in the rate of investment along with a more pronounced bias in favour of the capital goods sector. Pruning of social services would also militate against the building up of human capital over a long period. It is true that social services benefit the rich more than the poor. But, to the extent social services benefit the poor, any cutback on them will also cut into the welfare of the needier sections of the population in the short run. Similarly subsidies in support of the consumption of the vulnerable sections of the population can no doubt be justified on social considerations. But fiscal subsidies and other subsidized inputs and services benefiting those who otherwise reap fabulous profits are not justifiable either on grounds of production or of social justice. Fiscal prudence demands that all such subsidies should be withdrawn. A good deal of resources which would otherwise have appeared as profit in business accounts gets camouflaged as perquisites and expense accounts inflating the operating expenses. The existing fiscal instruments have failed to penetrate behind these accounting juggleries to prevent such dissipation of resources. One should, therefore, be discriminating while dealing with economy in public expenditure. If politicians could resist the temptation of mortgaging the future wellbeing of the economy for immediate political gains, considerable waste and misdirection of resources could be avoided. They should also be induced to employ tools and techniques of analysis and management with a view to introducing rationality in investment decisions and their implementation. Elimination of dysfunctional levels and tiers of administration and toothing the cutting edge would be helpful in accomplishing better results at the grass roots of administration. There is a clear case for shifting the focus of resource mobilization to those who have the ability to pay. The resource potential of the richer stratum of population is really great. The black money which plays havoc