At New Low Reviewed work(s): Source: Economic and Political Weekly, Vol. 3, No. 3 (Jan. 20, 1968), p.

210 Published by: Economic and Political Weekly Stable URL: http://www.jstor.org/stable/4358162 . Accessed: 25/01/2013 17:33
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp

.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.

Economic and Political Weekly is collaborating with JSTOR to digitize, preserve and extend access to Economic and Political Weekly.

http://www.jstor.org

This content downloaded on Fri, 25 Jan 2013 17:33:26 PM All use subject to JSTOR Terms and Conditions

January 20, 1968 ments in prices over the past two years will bring home this point. The movement of the groundnut crop is in full swing and with the continuing pressure of arrivals, prospects of any marked and sustained recovery in prices are generally discounted. But the scope for a further big fall in prices also seems limited as the season will soon have passed its peak and because of the likely resistance of growers to lower prices. Groundnut oil has already registered a substantial decline; it was quoted around Rs 4,600 -a tonne in January 1967 and is now available around Rs 2,900.

ECONOMIC AND POLITICAL WEEKLY ment will have only itself to blame if bumper crops do not produce any significant impact on commodity prices. And if cost of living does not conic down appreciably in a year of good agricultural production, public discontent is bound to increase and this would manifest itself in industrial unrest with inevitable repercussions on industrial production. The stock market has thus to contend with several economic and political uncertainties. T'Ae few prominent bull operators who are known to have been dominating markets for a long while are now developing symptoms of indigestion. The positions that these operators have accumulated in certairn scrips such as National Rayon, Indian Iron, Tata Engeneering and Tata Steel cannot but cause serious concern. The authorities are not unaware of this hut they seem quite helpless against the skilful manipulation by the big operators.

was perhaps the fear that curbs on American investment abroad, part of the Johnson Administration'sprogramme for protecting the dollar, might affect the flow of US capital to [ndia, even though Washington has been quick to point oul that these restrictive measures are directed mainly against developed countricv; having a payments surplus. The US has however, already announced its decision to cut aid to developing countries. The World Blank has raised its lending rate from 6 per cent to 6.25 per cent and out of the pledged credit of $900 million for the current fiscal year, the members of the Aid India Consortium have made firm commitment of only The outlook for castorseed depends $352 million so far. These developmainly on the flow of overseas inquiries. ments could not have gone unnoticed by Prospects of export business in castor the market. oil are considered to be reasonably proBut what is worrying the stock market mising. Outstanding sales up to March most is pc rhaps the tight budge.taryposiend are placed around 8,500 tonnes. tion. Calculations about the last CeniExport business should have a stabitral Budget have been completely upset lising influence on castor prices. But and the current fiscal year is expected castorseed could drift lower in sympathy to end with a huge deficit of over with linseed and mustardseed which Rs 400 crores. In view of his avowed are in a vulnerable position. Unless dislike for deficit financing, it would be weather turns unfavourable and crop interesting to see how Morarji Desai ideas have to be revised downward, prices can be mobilises resources to finance the maslinseed and mustardseed sive development effort which is necesexpected to seek lower levels. These mar- sary to accelerate the pace of growth. crops will start moving into the With the resources position being what ket only after March. it is, it is scarcely surprising that the Fairly good business is reported to stock market should not have been able have been put through recently ini to derive any comfort from the Finance groundnut extractions, mostly with tlhe Minister's promise to simplify and Communist countries. Export business rationalise the tax structure in the forthin cottonseed cakes has been extremely coming Budget. Morarji Desai does not restricted because of the discontinuance share the popular view that corporate of incentives from the new year. It taxation is heavy. Nor is he in favour should not be difficult, however, to put of taxing incomes of agriculturists through business in course of time even because they have "a larger pull in elec without the incentives. tions". On the other hand, he has been asking industrialists not to think always of profits.

Send YourSubscription
Order Today

(ENGLISH QUARTERLY)

At New Low

A VERY disappointing start indeed. The stock market has been on the retreat, in search of some safe shelter. It has already moved down tc slightly below last year's low and there is no indication yet that it has come to the end of its downward journey. The present situation is in sharp contrast to the one that prevailed in Janua-rylast when the market hit its year's peak. Several influences have been at work to further undermine the morale of the market which has been ailing since long. What made for the shaky start
210

While showing some signs of improvement, the economic situation continuies to be extremely difficult. There is perhaps nothing but the prospective bumper crop on which one can base one's hopes for economic revival. But with the political atmosphere charged with tension and lawlessness, the stock market is unable to share Morarji Desai's optimism that the worst is over and that things will improve. The difficulties that the country is experiencing are not just those which are inherent in the growth process of a developing economy. Many of them are of the countrv's own making. The Governl

A popular illustrated journal describing the mighty adventure of developing India's water and power resources. Single copy; 25 Paise Annual Re. I (Post free)

PUBLICATIONSDIVISION Post Box 201 1, Old Secretariat DELHI-6

davp 67/384

This content downloaded on Fri, 25 Jan 2013 17:33:26 PM All use subject to JSTOR Terms and Conditions