Lustre Taxed Away

False Alarms Nishtar THE stock market has still to recover from the budgetary chill. The mid-week rally induced essentially by technical considerations has been too feeble to make any impact on market sentiment which remains unsettled because of the adverse criticism of the budget proposals, it is said that tin; budget is not growth-oriented and that it will generate a new round of tax-induced inflation. It is argued that the increase in personal taxation will reduce savings in the hands of the people and act as a serious deferrent to further investment and that the larger burden on the corporate sector will vitiate the climate for new investment and would affect capital formation and slow down the rate of industrial growth. The threatened withdrawal of the development rebate alter May 1971 has come in for sharp criticism. It is argued that since it takes a long time for an industrial licence to fructify, the proposed abolition of development rebate will lead to deceleration of project planning activity. It would thus not only act as a future deterrent but also prove a current deterrent to economic growth.