The two day session of the National Development Council could not have been livelier. With Chief Ministers bandying brave words and successfully shielding their plans from being slashed down to size and with the Union Minister for Mines and Fuel crossing swords with the Union Minister for Railways, the session had all the making of modern passion play. And in the end that essential element of mystery which alone sustains a passion play was imparted to the proceedings simply by inflating the size of the Third Plan from Rs 10,200 crores to Rs 12,000 crores. This, in effect gives the public sector s Rs 1,800 crore shot in the arm. There is, however, a grimly unrealistic rider attached to this decision of the NDC. It says that even though the cost of the physical programmes in the public sector runs up to Rs 8,000 crores the actual financial outlay must not exceed Rs 7,500 crores which is the Planning Commission’s somewhat over-optimistic estimate of the available resources. As if this were not absurd enough, the NDC has gone a step further and appointed a committee to devise ways and means of covering the Rs 500 crore gap without resort to taxation. Since the committee’s terms of reference are vague it is responsible to presume that the committee will find itself groping in the dark for something which is just not there. The fact that the committee will not resort to taxation is of little comfort to the people as the NDC has already decided to raise the additional taxations from Rs 1, 650 crores to Rs 1,710 crores. And that rules out all possibilities of any increase in savings.
Naturally the present increase in the size of the Plan will require a greater volume of external assistance. In the Draft Outline the Planning Commission’s estimate of the requirement of external assistance was of the order of Rs 2,600 crores. While it has become increasing doubtful whether such assistance would be forthcoming, particularly in the shape of “untied” loans, it is rather strange that the NDC did not so much as bother to discuss the question of the availability of foreign exchange which is so vital to the implementation of the Plan. Its supreme contempt for such details and its uncanny knack of avoiding discussions on specific issues as agricultural production and employment prospects in the Third Plan period give not only a touch of unrealism to its decision to increase the size of the Plan but a touch of foolhardiness as well. And considering that the Planning Commission has already followed for deficit financing to the extent of Rs. 1,175 crores in the Draft Outline one dreads to think of the fantastic inflationary pressures that are bound to be released by the present increase in the outlay. In the absence of a firm price policy one just cannot see how the Plan can take the country anywhere near the take-off stage.
18 January, 1961
