Curb on Advances


AFTER struggling hard for little over a month to put up a steady show, Dalai Street last week gave in under the strain of political and economic tensions which have been growing with time. Equities have declined further under bear pressure and considerable nervous bull liquidation, and the market has sunk to an altogether new low for the year. Apart from disturbing signs of recession in quite a few important industries, confidence has been further undermined by the prospect of a freeze on prices, wages, profits and dividends which was discussed at the recent meeting in New Delhi of the State Chief Ministers. Morarji Desai is reported to have expressed his readiness to examine the feasibility of such a freeze. And the stock market simply dreads profit and dividend freeze for the very obvious reason that corporate profits and dividends are the two major factors influencing the outlook for equities.