Social Scientist. v 3, no. 30-31 (Jan-Feb 1975) p. 56.

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in the economy is estimated to be more than Rs 10,000 crores. Evaded taxes exceed what is being collected. The landlords gloat in unprecedented wealth and prosperity. But the ever increasing dominance of the monopolists and oligopolists over industry and trade and that of the landlords in the countryside as well as their combined power and influence over the state and the apparatus of governance and administration have made it impossible to carry out any drastic programme of restructuring ownership of property and property relationships. It is this institutional obstacle which has strangulated the efficiency of certain sensible economic and fiscal policies.

Concentration in ownership of property and the highly skewed distribution of income has left enormous disposable purchasing power in the hands of the affluent. The economic organization commits sizable resources in the production and import of comforts and luxuries meant to meet the insatiable demand for conspicuous consumption.There is no regulation or control which this section cannot flout with impunity. The progressi-vity in the taxation of luxuries only remains on paper. It is against such fortifications of vested interests that the limited fiscal policies have floundered. Deficit financing on an unprecedented scale is an admission of the glaring failure of fiscal policies in realizing tlie proclaimed developmental and social objectives. The instabilities of the system is also attributable to the constraints of the system on resource mobilization. Past performance in public saving casts a dark shadow over the prospect of substantial resource mobilization under the Fifth Plan. In the absence of comprehensive physical controls for the mobilization and allocation of resources as well as for the distribution of final output, the systematic failure to generate enough surplus from those who can afford to shoulder a much larger burden of resource mobilization would inevitably lead to fresh waves of inflationary financing. The utilization of P L 480 funds for budgetary purposes would only add fuel to the fire.

1 J M K.eynes, General Theory of Employment, Interest and Money, Ch 21.

2 W A Lewis, Economic Development with Unlimited Supplies of Labour, Manchester School

Studies, May 1954.

8 Ragnar Nurkse, Problems of Capital Formation in Underdeveloped Countries, 1953, Ch 2. 4 A Lewis, The Theory of Economic Growth, 1953, Ch 2. 8 EM Bernstein and I G Paiel, I M F Staff Papers, November 1952, pp 443-448.

6 H V R lyengar, Monetary Policy and Economic Growth.

7 B K. Madan, The Role of Monetary Policy in a Developing Economy.

8 Budget Speech, Government of India, 1957.

9 MJKThavaraj, ^Constraints on Resource Mobilization", Social Scientist 1, August 1972, pp 12-29.

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