MR. M.R. MASANI'S SPEECH DURING THE GENERAL DISCUSSION ON THE BUDGET IN THE LOK SABHA ON MARCH 7, 1960.

Summary

In this speech during the Lok Sabha’s general discussion on the 1960 Budget, M. R. Masani argues that taxation, planning, and public expenditure are imposing rising burdens on the Indian public without producing commensurate gains. He criticizes the Finance Minister for being “a prisoner of the Plan,” points to the rapid growth of civil expenditure, and contrasts the rise in per-capita income with substantially higher price increases. Masani attributes these failures to forced industrialisation on the Soviet pattern, expansion of the State sector, and inadequate public information about the returns from State enterprises.

Key points

• Masani argues that additional taxation has exceeded the limits anticipated by the Planning Commission and is contributing to inflation.
• He distinguishes excise duty from a sales tax, presenting excise as a tax on production that burdens both producers and consumers.
• He contends that indirect taxation is regressive, particularly when imposed on industrial raw materials and essential goods.
• He warns that the Budget will produce cumulative inflation and reduce the purchasing power of ordinary people.
• He criticizes the neglect of agriculture, arguing that agricultural growth has lagged behind growth in national income.
• He calls for substantially greater capital investment in agriculture during the Third Five Year Plan.
• He opposes the concentration of resources on giant steel plants and heavy industrialisation at the expense of agriculture and transport.
• He concludes that economic forces will eventually compel the government to reverse its current policies, but urges it to change course before further public suffering.