Swarajya, April 8, 1961
Between ourselves, honest voter, these private monopolies created by the pernicious system of permits, licences, quotas and controls (to be extended now even to foreign capital which voluntarily comes into the private sector) make the Congress Party's rich friends richer, and the poor poorer. It is a close conspiracy; we have a battle between money and liberty, between dharma and atheism, between freedom and communism clothed in Congress robes.
A strong plea against what is strikingly called "coagulated thinking" has been made by columnist "Parasara" in The Indian Express. The columnist Stresses the need for constructive, re-shuffling of ideas. He pleads for greater fluidity of thought and courageous disregard of what is mistakenly treated as unalterable. He says we must break through the walls raised by dogma. "Far too much is taken for granted in the name of the given situation" he says. "Issues which ought to continue to be debated are, for purposes of practical policy, taken as closed, decided once and for all." He appeals for free-thinking, if only for the tonic effect of such free-thinking. If this is not done, he says,'Ihe stalemate will be prolonged and stagnation made more certain". He cites land ceilings and direct taxation, as among the most arresting examples of this rigid assumption of 'the given situation'. After giving land ceilings as a capital instance of doctrinaire inflexibility, he leaves it at that without dealing more with it. He takes up taxation and says ‘Nowhere is such coagulated thinking more in evidence than in the sphere of taxation, direct and indirect, deficit financing, inflation and the treatment of the private sector'. Encrusted notions, he complains, prevent rational rethinking in these matters. He points out that Prof. Kaldor wanted income-tax to be drastically reduced because the profits of tax evasion in the highest stages are too high for anyone successfully to resist the temptation. If reduction of inequalities is an aim, he pleads, lower rates would be more effective than higher rates which only increase the scale of evasion. 'Misplaced zeal for achievement of economic equality has perpetuated the chain of mishaps," Parasara says, and proceeds to point out that it is not good policy to tamper with incentives and retard savings and investment. "The disinflationary effect of high taxation is a myth which calls for speedy exploding."
In the case of indirect taxation the sway of catchwords is even clearer, he says. He points out that the easy but erroneous path of bringing an article into the excise net, and to go on adding to the rate year by year is followed by the Government. 'The produce of basic industries as well as articles of common consumption are attacked, with the sales tax bringing up the rear. Customs duties account for Rs.29 crores of additional taxation and they are levied also on capital goods and machinery which will add to costs for a long time to come." Each single development, he points out, may by itself appear to be explainable but the total effect is disastrous and indefensible. What we call inflation today, he winds up, is not the result of mere errors in the policies regarding money and credit, nor even of governmental excesses in public expenditure, but is the resultant of the new trends in a number of spheres which are attributable to doctrinaire ideas.
