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

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1906-87 Budget Signs of Growth Pains without Growth

without Growth Arun Kumar The Budget for 1986-87 presented by the government as pro-growth and pro-poor is neither. Within a modified model of 'conflict', as applicable to the Indian context, any pro-poor policy must accelerate the growth of national income as a pre-requisite. The earlier policy of growth through an accelerated programme of public investments has been replaced in the recent past by dependence on increase in private investments. However, caught in the contradictions of conflict over taxation and expenditure policies to influence shares in national income, the new strategy has lost its thrust in the Budget for 1986-87. Yet the old policy has not been revived. The contradictions it had run into, which prevented the necessary resource mobilisation effort from being made, have not been resolved. The growth impulses in the economy thus face uncertain prospects and the 'conflict' over shares in national income is likely to sharpen further to the detriment of the lot of the unorganised poor THE Central budget for 1986-87 has come towards the end of a year of major changes in economic policies. The central budget for 1985-86 had ushered in major changes in regard to direct taxes, and announced substantial alterations in the industrial policies (like, delicensing of 25 industries and changes in MRTP). These were followed up by the provision of broadbanding of similar products for licensing purposes, further changes in MRTP, policy initiatives in textiles, sugar and electronics industries, announcement of the Long Term Fiscal Policy (LTFP), etc. Important reports, like the Chakravarti Committee Report and the Report on the Black Economy were received and action initiated. In sum, the contours of a new economic policy were becoming clear. In contrast, the central budget for 1986-87 appeals to be a damp squib.

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