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

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Statistics, but Little Information

For the economy, the past few years in succession have been very alike. The problems, policies and the emergency solutions have been virtually the same. The Reserve Bank's annual Report on Currency and Finance narrates in familiar officialise the same dismal story of the earlier years. During 196566, the economy faced probably the most serious difficulties, aggravated by the conflict with Pakistan and the consequent suspension of aid. Agricultural production fell sharply, following the worst drought in living memory.

For the economy, the past few years in succession have been very alike. The problems, policies and the emergency solutions have been virtually the same. The Reserve Bank's annual Report on Currency and Finance narrates in familiar officialise the same dismal story of the earlier years. During 196566, the economy faced probably the most serious difficulties, aggravated by the conflict with Pakistan and the consequent suspension of aid. Agricultural production fell sharply, following the worst drought in living memory.The rate of increase of industrial production showed a markedly declining trend, the index rising by 5.6 per cent in 1965 as against 7.5 per cent in 1964. Foreign exchange reserves increased by about Rs 36 crores but this increase was misleading.In fact, the increase was the result of the economy very nearly grinding to a halt. For, following the suspension of aid, imports were pared down to the very minimum, thus reducing imbalance in the payments position slightly. But this improvement in balance of payments was achieved at the cost of adversely affecting investment in additional production capacity and thereby future growth.

The Report spells out in great detail the changes in prices. The year witnessed a sharp upward trend in the prices of all commodities. Coming as it did after the price rises of the previous two years, it created a psychology of inflation. The rise in prices could till then be explained away, at least partly, as a concomitant of growth. Last year's upsurge in the prices showed how little had been done to set up the machinery that was needed to take care of the problem of distribution of food and other essential commodities. The usual facile remedies were trotted out: fair-price shops, rationing in urban areas, buffer stocks and fixing of remunerative prices for agricultural products. The problems are not new: they have been with us off and on since 1956. And yet, beyond pious exhortation, nothing practical was done.

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