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Blowing Hot and Cold

May 31, 196*) sists of a hundred to three hundred horses)". Here again, Lin Piao's report does not spell out the kind of reforms that would be forthcoming. He stops at emphasising the importance of the work in the cultural and the educational field. However the experiments during the last three years have given some inkling of the nature of change. Lin Piao's report only reiterates that the winds of change will blow. Mao has attempted throughout this struggle to emphasise one point quite often lost sight of: It may be important to debate which policies are going to be implemented; but more important is the question of policies for whom.

Signs of Weariness

Signs of Weariness Nishtar THE stock markets have scaled new psaks. Though they are still not out of breath, signs of weariness are beginning to emerge. While bulls continue to be on the offensive they have changed their strategy in that they arc now concentrating their attention on scrips in which there still exists heavy "short" interest or which have been lagging far behind in the recent up- surge. Much of the past week's rise has be n caused by nervous short covering and scarcity of fresh offerings; bull support has been very selective.

Deceptive Gaiety

Equally important to the industry is the need for the introduction into India of new types of raw materials. Production of tyres and tubes in the rest of the world now almost completely utilises new tyres of synthetic fibres such as nylon and polyester. Further, while India can offer only one type of synthetic rubber, other countries have the advantage of advanced synthetics which improve the wear and other characteristics of automotive tyres. The various rubber associations in India have already suggested to the Government that steps be taken to introduce the new types of raw materials into India at the very earliest date. This is obviously of great importance for the acceptance of India's tyres and tubes in the world's export markets. It is, however, also important that new and better types of tyres be made available to the Indian consumer.

GEEDA Needs Probe

GEEDA Needs Probe Nishtar THE worst fears about the scheme for canalisation of export of groundnut extractions are beginning to come true. The Groundnut Extractions Export Development Association (GEEDA), through which all exports arc being canalised, is hardly two months old hut the way it has been going about enforcing discipline on shippers to ensure that exports to the rupee payment area and five currency area are in the ratio of 70:30 has exposed it to severe criticism. If timely action is not taken to cheek GEEDA's activities, it is likely to do incalculable harm and even ruin the cause it seeks to promote. It is not enough to ensure- that exports to rupee payment and free currency areas flow in a certain prescribed proportion. It is far more important that this is achieved without a contraction in the total volume of exports. If the link scheme is to make any sense then exports to free currency areas should form a larger percentage of the expanding volume of trade. But fresh export business after the introduction of the canalisation scheme has dwindled to a trickle and this can by no means be dismissed as a seasonal phenomenon, East European buyers India's major customers have gone on a virtual strike, restricting their additional purchases to the barest minimum. Business with the UK has been of a routine nature and always goes on whether there is any incentive or not. How has GEEDA been going about its job? To begin with, exporters to rupee, payment areas were called upon to pay a deposit of Rs 15 per tonne for obtaining quota slips for effecting shipment and along with it they had to give art undertaking to export the prescribed quantity to the free currency area within three months of the shipment of goods, or purchase immediately quota entitlements from other shippers who had sold or shipped goods to free currency areas. If they failed to honour their commitment they stood to lose their deposit money and also ran the risk of additional penalties and disciplinary action. As if this was not bad enough, regulatory measures were soon further tightened. For obtaining quota slips for exports to rupee payment areas under the revised scheme, exporters are required to execute duly stamped bonds and pay a cash deposit of Rs 15,000 for the first 1,000 tonnes, Rs 30,000 for the second 1,000 tonnes and Rs 45,000 for the third 1,000 tonnes. In other words, export sale of 3,000 tonnes to rupee payment (East European) countries would attract a deposit of Rs 90,000 which could be forfeited in the event of failure to fulfil the corresponding obligation to export or procure equivalent quota entitlement for the free currency area.

Further Rise

Further Rise Nishtar THE stock markets were in exceptionally good form last week. They took a big leap forward with Bombay and Madras in the lead and Calcutta and Ahmedabad trailing behind. With bulls assuming an aggressive posture and bears in no mood to challenge, equity prices recorded further impressive gains. Chemicals and pharmaceuticals, rayons, cotton textiles, steels, engineering, shipping, cement, sugar

Never So High

Never So High Nishtar IF cotton were not a highly inflammable commodity, one could have easily said that the cotton market is aflame. For there is a real scramble for cotton. Any good lot on offer has a ready buyer and price seems to be no consideration at all. The inordinate delay in the import of cotton under PL 480 is said to be the major factor behind the recent spurt in cotton prices. But no less important a factor is the remarkable buoyancy in the cotton piece-goods market. It is not just that increased agricultural production is at long last having its impact on cloth offtake. According to informed sources, the boom in textiles is in no small measure due to smuggling of textiles on a massive scale to Pakistan where textile production has been seriously disrupted by political disturbances.

Marking Time

Marking Time Nishtar THE stock markets chose to mark time. Excepting Lyons Range, which was under considerable pressure induced mainly by apprehensions about labour unrest in the engineering industry, other markets put up a fairly steady appearance though they also staged a further modest retreat. Rallies continued to attract tired bull liquidation but selling pressure subsided at lower levels and there was also some evidence of cautious buying in selected counters, especially in the cash section. Net changes over the week made a mixed showing with gains outnumbering the losses by a small margin. Neither bulls nor bears seemed happy over the outcome of their week's encounter.

Corrective Phase

 the rate of growth of production in the private sector will slow down during the year. On the contrary, and I emphasise this point afresh, the prospect of a third good year of agricultural production should mean that, with the continued generation of mass purchasing power, the demand for consumables will show a further substantial increase. Indeed, Mr Desai, in his budget speech, has made the point that rising levels of investment can be "achieved without inflation only on the basis of a growing volume of production of essential consumer goods". In turn, the improvement in agricultural productivity has to be accompanied by "greater efficiency and expansion of capacity in consumer goods industries". As such, with the possibly substantial improvement in output by consumer goods industries, and in view of the impact it will make upon the demand for the output of the basic industries, I expect that the banking system will, during 1969, be called upon to shoulder considerable responsibility in financing of such ventures. There is no doubt that the banking system is equipped to discharge that responsibility efficiently and swiftly.

Bulls Retreat

Bulls Retreat Nishtar THE tide has turned. The stock market bulb who had been dominating the scens for a long while are on the retreat. With rare exceptions, the previous weekend highs have not been seen again. Post- Budget gains have disappeared all too quickly and net changes over the week show sizeable losses all-round. Only a few counters have managed to hold firm due to special considerations. With its technical position rendered highly vulnerable by heavy short covering under the exciting spell of pre-Budget optimism, corrective profit-taking could not be absorbed without causing a big dent in prices.

Stock Market at New High

But, following from the desire not to use NSS crop figures, most States are reluctant to tabulate their part of NSS crop data in time. Nor has the Union Government made any serious attempt at pooling the Central and State counterpart samples by persuading or forcing it on the States.

Stock Market Aflame

Stock Market Aflame Nishtar ONCE again the stock market has witnessed a sudden outburst of influential buying on the eve of the Central Budget which has sent equity prices rocketing; again, b cause an almost similar situation obtained last year also. The market which looked rather weary in the preceding week has, all of a sudden, dashed its way up to its 1962 peak

Stock Market Beats Retreat

Stock Market Beats Retreat Nishtar THE break has come. The stock market made no new high last week; it had to beat a hasty retreat instead. The ground gained over more than a fortnight or so was lost in a matter of a few days. Lured by the exciting mood of the market, all those who had ventured a short joy-ride have been quickly dislodged and many of them have received minor injuries. This is the first reverse that the market has had to face in its aggressive bull campaign launched about the beginning of the year.

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