On The Turnpike by TCA Srinivasa-Raghavan; Published by Academic Foundation ; Pages 101; Price Rs 1500/-
In a space of twenty years India lost two Prime Ministers, fought two wars and grappled with a major drought.We had a 'Crisis Incarnate'.It was a 'Lost Decade'.Then came Indira Gandhi and a new dawn.
Historically the next defining period was 1970-1979.Morarji raised overall level of taxation, tightened import controls. The foundation was laid of the 'Quota-permit control Raj'. Indira who presented the budget used it as an instrument of politics. From 1970-1974 the economy turned sharply left. Indira set the tone as she presented the 1970 budget.
The fiscal crisis of 1973--1974 acted as a damper on the redistribution zeal of government. Y.B.Chavan presented a mini-budget aimed at eliminating inflation,cutting expenditure by direct and indirect means. The budgets of the emergency years revealed caution and good housekeeping. By 1979 thanks to high oil prices and inflation the good work of the previous five years was undone.
During the period 1980-1990 government pursued growth through heavy deficit financing ignoring structural reforms, By 1981 a huge loan was obtained from the I M F which led to some stability.
The budget of Pranab Mukherjee--1982-1983 accelerated the pace of import substitution, increased exports and enlarged remittance facilities.Rajiv Gandhi gave impetus to growth, cut taxes, liberalised imports and eased rigours of industrial licensing. The huge drought of 1987 madeIndia to go in for large imports. India was obliged to mortgage its gold to the Bank of England and impose severe import restrictions.