ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Foodgrain Storage-Full Circle

The Reserve Bank has done well to say categorically that oft-mentioned solutions like improvements in the organisational set-up and more cordial labour relations, even if they improve capacity utilisation ratios in certain areas, "can obviously constitute only a part of the solution''. In fact, better capacity utilisation is often possible only if there is investment in rehabilitation, renovation, etc. The Report specifically mentions the older steel plants as a case in point. "in the majority of the engineering industries, utilisation levels would improve only if their user industries have higher production and investment". However, low levels of investment in these industries have, accentuated the inflation by keeping down the output of certain basic industries and creating shortages of infrastructu- ral facilities such as transport, irrigation and power. In sum, the economy has been thoroughly caught in the vicious circle of low investment, tardy expansion of production potential and scarcities, rising prices, poor real savings and low investment. The recession and the steep rise in prices are thus closely interrelated.

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