ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Rattle All the Way-Tariff Commission Evades Policy

December 21, 1968 and persists in spite of it, then two propositions would seem to follow: i) that unionisation is not an independent variable in the system, and ii) that Government policy regarding support to unionisation has no basis in fact But the casual relationships cannot be taken as well established, and further work is needed.

Dismal Chronicle

Annual Report on the Working of Industrial and Commercial Undertakings of the Central Government, 1966-1967; Bureau of Public Enterprises, Ministry of Finance, New Delhi; pp ii + 202.

Slide Back in Monetary Policy

between the different types of inputs since all of them are not to be claimed for relief purposes, would certainly involve a much greater degree of checking of books and much greater requirements regarding maintenance of accounts than is implicit in the present system of excise duties. Third, once the concept of stock adjustments is introduced, innumerable problems 'will be created regarding the basis of valuation and composition of stocks to discover what proportion of it consists of tax- free goods and so on. Since Bhoothalin- gam would like to confine the exemptions only to current inputs, it is obvious that care must also be taken that items of capital nature are not set off against tax liabilities. In effect the proposal as it stands will lead to almost as much complexity in the assessment and collection of excise duties as in the case of present taxes on profit The one major advantage of excise duty, namely, collection of the duties more or less uniformly throughout the year without accumulation of undue arrears would also be lost.

Naphtha Turn-around

Naphtha Turn-around Arthagnani THE Government's policy on fertilisers has gone through disturbing convolutions without bringing about much progress in the fertiliser manufacturing programme. The logic of setting a target date for presenting proposals was questioned in these columns, and it was suggested that if a date had to be set, it would be more advisable to set a date for the free sale of fertilisers (say, December 1980). Such a policy, by reducing the period of free sale for a late-comer or a laggard would have been more logical than the present policy which gives the same terms to all comers, enabling each manufacturer to hold out for improved terms. The revised final date

A More Useful Tariff Commission

A More Useful Tariff Commission ONE of the consequences of the foreign exchange crisis of 1956-57 and the subsequent imposition of quantitative restrictions on imports was the irreverence it encouraged in industry towards the Tariff Commission as a protecting agency. In later years, particularly under the Lal Bahadur Shastri regime, the Commission earned further disrespect when its recommendations vegarding continuance of protection to some industries were rejected. This was the genesis of the apoint- rr.ent of the Tariff Commission Review Committee to determine the future functions of the Commission. The Committee's report has been just published.

Murky Light on Licensing

Murky Light on Licensing Arthagnani INDUSTRIAL LICENSING was intended to ensure the implementation of the industrial programmes laid down in the plans. Properly administered, the licensing system can ensure that capacity does not exceed plan targets, influence the geographical distribution of industrial capacity and counter tendencies towards concentration of ownership and control of industry. In fact, as is by now widely known, licensing has failed to achieve any of these objectives. Why did it? In large part the answer must bo sought in the administration of licensing.

A Policy for the Automobile Industry

the view one takes of the process and the concept of shifting. If shifting of direct taxes is achieved by and large by increase in prices of the products by each industry then obviously much of the discussion about THE POLICY for automobile manufacture was laid down in 1953 after an inquiry by the Tariff Commission. Since then there have been two ad hoc inquiries in the industry, one in 1956 on fair prices and the second in 1960 on the manufacture of a small car. Recently, the Government has announced the appointment of a committee to inquire into the quality (or, rather, the deterioration in quality) of cars. Further, it has again started to examine the possibility of making a small car.

Budget without a Plan-The Fiscal Possibilities

March 1961 and May 1962. A detailed report upon my work will be published in due course.
7 See Levy, op cit, p 72.
8 See Misra, 1964, op cit, p 136.

Budget without a Plan

It is also established that capital earnings other than profits (i.e, interest and depreciation) have also not been adversely affected; their share in net and gross value added, IN A PLANNED ECONOMY the role of the budget, though not unimportant, is not of the same significance as in an unplanned economy. The broad strategy of growth is determined by the Plan. The budget is concerned with the tactics

SURVEY OF INDUSTRY-Why a Credit Council is Necessary

Why a Credit Council is Necessary Arthagnani THE IDEA of a Credit Co-ordination Council mooted by the Chairman of the State Bank in his annual statement to shareholders has met with opposition from commercial bankers and, judging from newspaper reports, even the Reserve Bank has not reacted favourably. Explaining his suggestion, the State Bank Chairman had said: "the essential task of credit control should be viewed in the light of co-ordinating more effectively the credit mechanism with the planning mechanism ., . this important task may appropriately be tackled through a Credit Council composed of representatives of commercial banks, Planning Commission and industries ... in the recent past, the distribution of credit between the industries has not been proportionate to their levels of production. Selectivity in credit control should mean that this kind of maladjustment could be avoided". The main function of the Council thus would be to distribute credit according to the requirements of Plan targets, economic policy and levels of production. The task is a vital one and so the proposal deserves to be examined carefully.

Growth of the House of Birlas-Lessons for Licensing Policy

that, for licensing, the exemption limit for new undertakings should be raised from Rs 25 lakhs as at present to Rs 1 crore. For substantial expansion the limit should be 25 per cent of existing licensed capacity or an investment of Rs 25 lakhs, whichever is higher, and for new articles an investment of Rs 25 lakhs.

Bank Chairmen Speak

of a Marxist-oriented alternative to the Labour Right-wing, which because of an industrial and popular cadre base, backed by previous dis- sident Labour Left-wing groups, may offer a more serious challenge than the Labour Party has had to face on its left since the 1930's- Bank Chairmen Speak Arthagnani OF ALL INDUSTRIES, banking is the one most concerned with the general state of the economy. Statements of bank chairmen at annual general meetings of banks, therefore, provide an interesting insight into their reading of economic trends. Last year was an unusual one for the Indian economy, and so the comments of the chairmen of leading banks at the latest annual general meetings of the banks are of particular interest. Besides being concerned with the more gene- ral problems of planning and devaluation, bank chairmen have also discussed the role of credit policy and their own part in it, and the impact of various developments on their operations.


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