The following is an excerpt from an article published in the Indian Libertarian Magazine by G N Lawande in July 1963. His arguments supporting the necessity of reducing public expenditure still remain relevant.
“Since independence, our economy has been set to achieve rapid economic growth in order to raise the standard of living of the teeming millions and to achieve greater equality in income and wealth. To achieve these social objectives, to establish a socialist pattern of society taxation policy has to satisfy two conditions, namely, to mobilise the domestic resources for rapid economic growth and to create conditions for the implementation of social aims. It must be remembered here that the taxation policy of our Government has assumed great importance in recent years though it is one of the factors that lead to economic growth. Under the present conditions existing in our country, the primary need is to increase savings of the people because the economic growth of a country rests on the volume of savings that it is able to accumulate and invest productively. Saving alone does not lead to economic growth. It is the productive investment that leads to a rise in the per capita income of the people which increases the capacity of the people to save more and invest more. . .
. . . it is the unrealistic taxation policy that is mainly responsible for the slow progress of our economy. To achieve the take off stage it is necessary that the whole system of taxation should be reexamined with a view to enable the companies to expand their resources for productive investment. What is urgently necessary is the cut in the public expenditure. Some may say that a cut in the public expenditure will reduce the income and employment but this misconception has been aptly exposed by Prof. Shenoy. He observes that “the foregone expenditure of the state does not disappear into thin air”. He proceeds to say – “In their place would now appear the additional investment or other expenditure by the people.”
Access the full document here. (page 9)
First Published in the Indian Libertarian in July 1963.
Other editions of the publication can be accessed at Indian Liberals, an open, multilingual digital archive committed to preserving liberal voices in the Indian public sphere.