22 SOCIAL SCIENTIST cost of living, or attempts made, wherever feasible, to supplant labour by machinery, in case the pries level of the latter still lags behind; depending upon circumstances, more extreme measures too could be thought of. The developments in the polity since 1974 indicate that this phase has already arrived. Lock-outs and lay-offs have proliferated, and industrial employment has further fallen off. A further contraction in the outlay on mass consumption goods cannot thus be ruled out, unless there is an upsurge of demand from the rural sector, which is certainly not yet evident. One is thus currently witnessing the curious spectacle of Indian industrialists groping for markets abroad despite the huge potential inside the country, and of the authorities launching on lavish subsidy programmes in aid of these efforts. Whether an export-led growth will ever be a viable proposition remains a wide open question. If the forces which are the major propellents of the shift in inter-sector terms of trade remain in control — and till now there is no evidence of developments to the contrary — given the nature of the Indian economy, input costs will tend to rise continuously, and inflation will become endemic to the system., effectively quashing the possibilities for a major breakthrough in the international market. There would then be little option left than to re-examine the domestic structure of assets and income distribution and devise modalities of reform which could lead to a stimulation of the domestic market as well as of the sources of savings, both key factors for rapid growth. [Some of the material used in this article are from the author's forthcoming publication.Terms of Trade and Class Relations, Frank Cass, London 1977.] 1 The data are from Reserve Bank of India, Report on Currency and Finance, 1974-75, volume II, statement 17. 2 Following a temporary halt during 1975-76, the current financial year has witnessed a resumption of the trend: between end-March and end-September 1976, as against a rise in the index number of wholesale prices of manufactures of the order of 4.3 per cent, the rise in the wholesale prices of food articles has been 12.9 per cent, and of industrial raw materials, 29.3 per cent. See Economic and Political Weekly, 23 October 1976, p 1674. 8 For a discussion, see A V Jose, ^Trends in Real Wages Rates of Agricultural Labourers" Economic and Political Weekly, Review of Agriculture, March 1974. 4 Ranjit Sau, "Some Aspects of Inter-sectoral Resource Flow", Economic and Political Weekly, Special Number, August 1974, pp 1277-84. 5 With 1956== 100, the index number of industrial production advanced from 135 in 1950 to 174.7 in 1964; in contrast, with 1960 === 100, between 1964 and 1974 it rose from 156.2 to 200.6. Of even greater significance in the present context, despite persistent excess capacity, the output of consumer non-durable goods rose by only 43 per cent at least partly reflecting the constraint of demand for mass consumption goods. See Reserve Bank of India, op.cit., statement 11. 6 The source of tables I—IV is the analysis of Reserve Bank of India's data presented in S L Shetty, ^Trends in Wages and Salaries and Profits of the Private Corporate Sector", Economic and Political Weekly, 13 October 1973. Since the internal composition of the organized industrial sector has changed considerably