ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Wages of Inaction

fidence may be seen in the fact that quite a few capital issues, including debenture floatations, have been undertaken without any institutional help at all. In fact, faced with lack of demand for their funds, the development banks arc chasing issues to underwrite. No longer are underwriters called upon to officiate as undertakers. With some Rs 20 crores to be invested by December- end, the LIC is also unusually active in the gilt-edged market. Actually the boot is on the other foot. In the recent loan floated by the Bombay Municipal Corporation, the Municipal authorities initially declined to accept any subscription from LIC! WHENEVER prices of a controlled commodity rise above the officially fixed ceiling, Government's standard response appears to be to either raise the ceiling or to scrap control altogether. Natural rubber is the most recent case in point. Earlier this month price of natural rubber soared to Rs 6,200 per tonne leaving the official price of Rs 4,160 per tonne way behind. Government reacted promptly by announcing the abolition of control! The controlled price had been fixed at Rs 4,160 a tonne only a year ago after an exhaustive inquiry by the Tariff Commission. What went wrong so soon?

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