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NEW DELHI-Rough Going for SAIL

able to purchase sufficient raw materials to maintain minimum production. While, in the preceding two years, earnings from fabrication jobs came to the company's rescue, this source could not be of much help during 1974-75 as the company could not accommodate its customers with the same credit facilities as extended earlier. The management is engaged in mobilising resources and seeking further funds to overcome the shortage of finance. M L Shah, who had been chairman for a long period, resigned from the board in May 1975. S C Roy has been elected in his place.

NEW DELHI-Light and Shadow

NEW DELHI Light and Shadow B M THE improved performance of several of the public sector undertakings, producing valuable machinery, equipment and intermediate goods, has been very much in the news. Some of these undertakings have even exceeded their targets. Investments in them are at last beginning to pay off. Indeed these enterprises have emerged as significant growth elements

NEW DELHI-Operation Rescue

NEW DELHI 'Operation Rescue' B M THE revival of sick units is now accepted as a major preoccupation of the union industry ministry as part of its drive to achieve, a 10 per cent rate of growth in industrial production in the current year. However, ideas in regard to "operation rescue'' of sick units have apparently undergone some change. It is no longer regarded as wise or economic to take over the management of sick units as was done in the past in the case of many sick textile mills and other factories. As is shown by the balance sheet of the National Textile Corporation, which manages the taken-over textile units, the cost of running these units is quite considerable. The programme which has now been drawn up for reviving sick units envisages support and assistance to their managements on a generous scale to overcome their difficulties. It envisages rescheduling of outstanding debts, granting of fresh loans on soft, tenns and at subsidised rates of interest and supply of machinery and parts by public sector units on deferred payment basis. The programme has not been conceived of as a short-term. one-year, operation. ft will be spread over nine to ten years. Rough estimates made in the industry ministry indicate that the total cost of the programme may run to Rs 1,000 crores. Besides pumping in resources of this order, the scheme envisages further incentives by way of a dual pricing policy for additional production through better utilisation el capacity, such as have been offered to the sugar industry. To begin with, Rs 100 crores will be committed for the purpose tin's year, of which Rs 50 crores are proposed to be earmarked for DGTD units.

NEW DELHI-Welcoming Foreign Private Capital

holding of inventories), power shortage, etc; if not also in terms of oligopolistic practices on the part of our industrial leaders. Tax concessions are not a remedy for these ills. On the other hand, large tax concessions, such as have been granted at high income levels, will stimulate the demand for luxury goods. The motor car industry, for example, will have a double impetus by way of concession in income taxes and by way of reduction in excise duties. To be consistent, the government may perhaps help bring down the price of petrol, too! The Budget for 1976-77 will increase inequalities of income and consumption in the society. Whether by itself it will stimulate growth or not is not certain. If the above analysis is correct it will not. Belief to the contrary betrays a denial of the principle of socialism and an acceptance of the dominance of the private sector. The Budget seems indeed to be an irrational surrender to forces which are destined to lead the economy away from the avowed objectives of planning.

NEW DELHI-Chief Ministers and Land Reforms

Chief Ministers and Land Reforms B M THE Chief Ministers' conference last week convened by the Prime Minister to review the implementation of the 20- point programme, concerned itself closely with the vital issue of land reforms. This was the most important item on the agenda of the conference. The record was, admittedly, far from satisfactory. At the end of the two- day deliberations the conference announced the determination of the Chief Ministers to carry out a time- bound programme of action on land reforms. It decided, in particular, to complete the implementation of land Ping laws by June 30, the deadline to which the Chief Ministers had earlier pledged themselves at the conference convened in August last year by the Congress president. This was a bold commitment on the part of the political leadership, especially because the progress in this direction has not been particularly impressive in the last eight months.

NEW DELHI- Significance of the Coming Budget

NEW DELHI Significance of the Coming Budget B M IT is not wise to speculate about the budget for 1976-77 which is in the final stages of its preparation for presentation to Parliament three weeks hence. But certain hints have been dropped by- people in high positions which attract attention. They indicate the approach and outlook which is bound to impinge on budget-making. This is all the more so because it is now fairly well known that the coming budget, as traditionally understood, will not be the Finance Minister's or even the Finance Ministry's budget. The Finance Minister and the Finance Ministry are now bereft of the and of initiative and powers which are required for any such enterprise. The processes of decision-making lie elsewhere.

NEW DELHI- Reviving the Plan

ECONOMIC AND POLITICAL WEEKLY Annual Number February 1976 Reviving the Plan?
B M WITH price stability restored for the time being and easier conditions on the agricultural front, the question of revival of the Fifth Five-Year Plan is at last receiving some attention. The Minister of Planning, I K Gujral, had told Parliament earlier this month that in the favourable conditions which have now emerged it would be possible to resume work on giving final shape to the Fifth Plan. The Prime Minister too has found occasion recently to say a few words in defence of planning and the gains of planning. These have come as a much-needed morale-booster for the denizens of Yojana Bhavan.

NEW DELHI-Retreat on Food Front

NEW DELHI Retreat on Food Front B M IN a written reply to a question in Rajya Sabha last week, the Minister of State in the Ministry of Agriculture and Irrigation, A P Shinde, made an important disclosure which has not received the attention it deserves. The Minister revealed that procurement of rice so far was barely 2.5 million tonnes as against the target of 4.6 million tonnes. The target itself, it may be recalled, had been scaled down at the Chief Ministers' conference from the 5.3 million tonnes recommended by the Agricultural Prices Commission. The reason advanced for this was the floods in some parts of the country, though it was admitted that despite the floods the kharif crop this year was a bumper one and estimates of total production were kept intact.

NEW DELHI-Paving the Way for a Soft Budget

From the American standpoint, the year 1975 thus has been not the year of Vietnam but rather a post-Vietnam year. It has been a year of order. Portugal has been taken care of. Angola is on the threshold of partition. The two Koreas like the two Germanys have come to stay. The anti-imperialist pur- suers of non-capitalist path of develop-" ment have been quite charming and co-operative. Kissinger can now plan his memoirs. He can also organise further sale of wheat to the Soviets so that their buns can taste better! FROM OUR CORRESPONDENTS NEW DELHI Paving the Way for a 'Soft' Budget B M ONE of the highlights of the economic policy resolution passed at the plenary session of the Congress at Chandigarh is the reaffirmation of the party's commitment to the special Indian variant of socialism resting on a mixed economy. This has been further elaborated now by with the tagging on of an ingenious new qualification of a ''socially conscious" private sector playing a useful role in accelerating the development process. This is not an altogether new idea, of course. A large industrial group had some time, ago urged differential treatment of the socially conscious and the anti-social elements in the business community in the enforcement of government controls and regulations and the distribution of incentives and concessions.

NEW DELHI- Break-through in Oil

December 27, 1975 A Correspondent writes: FOR the second time since the declaration of martial law in 1972, the Philippine government authorities have uncovered what they claim is a ClA- connected plot to assassinate President Marcod. The latest plot was allegedly the work of anti-Marcos exiles in the United States and "some alleged former US CIA men".

NEW DELHI-Co-operative Farming for Whom

per cent in 1973-74. Thus profit margins and profitability of industry in the private sector were generally much better in the Fourth Plan period than they were at any time in the past' The higher profit margins were made possible by certain factors external to the private corporate sector and certain others internal to it. Externally, the injection of vast amounts of money through bank lending to government, government-owned corporations and private commercial enterprises helped the private corporate sector to appropriate a larger share of aggregate money incomes. The period under consideration saw a disproportionately large expansion of money supply. Money supply grew by 8 per cent in 1968-69 and 10.5 per cent in 1969-70; in the next four years it rose by 11.8 per cent, 14 per cent, 15.7 per cent and 15.2 per cent, respectively. In the five years of the Fourth Plan taken together, money supply rose by as much as Rs 5,070 crores, or by 100 per cent During the same period, the wholesale prices index for all commodities (base: 1961-62= 100) rose by 72 per cent.

NEW DELHI- Growth through Incentives

NEW DELHI Growth through 'Incentives' B M THE availability of resources is being reassessed by the Finance Ministry and the Planning Commission in an attempt to achieve a substantial increase in the Plan outlay in the coming year. A renewed push to economic growth is considered feasible and desirable with price stability becoming possible following a more comfortable food position. The question is whether this will result in new investment both in the public and private sectors.


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