Articles by Arun Ghosh

Drought: The Rajasthan Scenario Arun Ghosh Severe drought is stalking Rajasthan. Even if the food stocks with the government can avert famine deaths, the biggest problems are likely to be, first, drinking water and, second, fodder for the cattle. And there is no doubt that there is little connection between the drought relief works programmes and long-term plans consistent with the needs of the area.

Black Money and Its Impact on Savings and Investment Arun Ghosh The impression, shared even by experts, that the rate of unrecorded savings out of black income is higher than our recorded saving rate and that, therefore, the rate of saving is understated in national accounts statistics, is based on a misunderstanding of the methodology used for estimating savings. Nor does black money go to finance large-scale investment activity; it mainly goes for conspicuous consumption, or speculative activity or acquisition of urban property.

The larger aid promised by the Aid India Consortium for the current year at $ 5.4 billion contains seeds of serious problems in the future. Borrowing from abroad can be useful provided the imported savings are used to finance essential imports. But if we start importing power generating equipment against tied aid because of a shortage of rupee resources we would be asking for trouble.

The Budget, Inflation and All That Arun Ghosh ONE has to admit that although prices have generally been rising, there is no visible sign of pervasive inflation in the economy as yet. Budgetary deficits have been increasing at an alarming rate over the past several years, as a result of the excess of government expenditures over income (or receipts), and monetary circulation has been increasing, government recourse to borrowing from the banking sector being a prime factor. And yet, the increase in the price level has been significantly less than one would expect as a result of the large budgetary deficits. So, what really has been happening? Is it that some of us, outside government, have been ultra-conservative, scared, and generally out of touch with reality when

NEW DELHI Congress Working Committee Disowns Government's Economic Policy BM THE ruling parly attempted to turn an extraordinary somersault by its resolution on what it chose to condemn with characteristic cynicism as the "grand design of destabilisation" of External forces hostile to India" which, it proclaimed with equally cynical self-righteousness, were "inextricably linked with internal forces of political and economic subversion". It rested its case on "the events of the last six weeks'' (the resolution was adopted on April 18). This presumably means that the beating the ruling party, with the prime minister as its star campaigner, received in the West Bengal and Kerala assembly elections is sought to be projected as part of the grand design of destabilisation. It is also an admission that the hounding out finally of V P Singh from the government, after his transfer from finance to defence, and the exposure of a series of scandals, especially in costly defence purchases, have shaken the government and, despite its massive majority in parliament, the spectre of destabilisation has begun to haunt the political caucus in power. But if the Congress leadership thought that its latest shrill cry of destabilisation would carry conviction with the public and would smother all further questioning of its policies and conduct, it has failed to achieve such a diversionary purpose. On the contrary, it has opened itself more to public ridicule and strengthened doubts about its credibility and integrity. The edict that any questioning of the rise in defence expenditure in this year's budget presented by the prime minister himself would be anti-national has not prevented questions being raised on shady defence deals with arms merchants abroad. In contrast to the shrill denials and diversionary tactics of the government leaders at the centre, the dignified manner in which the non-Congress chief ministers conducted their business at their recent meeting in New Delhi and dealt with pressing political issues of public interest has been very refreshing. The chief ministers suggested that the questionable defence deals must be examined in parliament, if necessary in a special session not open to press and public.