Articles by Nishtar

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.

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.

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.


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.

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.