Borrowing from the Rich

Borrowing from the Rich Amal Sanyal RECENTLY the Union government is seeking to reduce its borrowing from the RBI, as a matter of policy, not by increasing direct taxes, nor by reducing its wasteful consumption or the items of budgetary transfer to the rich, but by directly borrowing from the public. Borrowing from the public is of course an inoffensive expression to mean borrowing from the rich. Since the largest items in the recent Union budgets are transfers to the rich and the payment of salary and perks to the bureaucracy and the government servants in the higher brackets of income, this policy in plain words can be described as borrowing from the rich in order to maintain the consumption of the rich. From the point of view of common- sense the policy certainly looks a trifle curious in that it seeks to pay the rich a stream of interest receipts for the expenses incurred on maintaining mostly their own living standard. The following is an attempt to examine the various implications of this course somewhat more closely.