The emphasis on faster growth with greater social justice calls for a massive resource mobilisation effort. More rapid industrial growth, for instance, would be possible only if there is an adequate expansion of power and transportation infrastructure and of capacities in the basic and machine building industries. These are difficult areas and setting up of new capacity involves the tying up of sizeable investment resources over fairly long gestation periods. Clearly, vast public investment outlays would be needed in these fields. Indeed, in considering the magnitude of the fiscal effort required for rapid industrial growth, we sometimes tend to forget that were it not for State initiative in establishing industrial capacity for steel making, heavy industrial and electrical equipment, machine building, production of crude petroleum and refined products and mining, our industry would have been scarcely more modern now than it was decades ago. Nor would we have had an adequate industrial base for national defence.
Larger public outlays would be necessary not only for executing the programmes for removing poverty and unemployment but also for meeting our defence requirements. I would be only too happy if our efforts for lasting peace and harmony in the subcontinent bear fruit so that we are able to set aside more resources for productive investment.
Clearly, the stepping up of the pace of growth and development in the coming years will involve a much more intensive fiscal effort than at present. Perhaps no one is as aware as I am of the inadequacies and the shortcomings of our fiscal system. It needs to be streamlined and rationalised for ensuring successful execution of our development plans. The Wanchoo Committee which submitted its report last December has suggested a whole set of measures to check tax evasion and avoidance, to cleanse the economy of the scourge of black money and to make taxation generally a more effective instrument of development. These suggestions are being carefully examined and the Government intends to introduce legislation for improving the system of taxation. It is now recognised that the expanding agricultural sector should also make an adequate contribution to resources needed for national development. The Government has appointed a Committee headed by Dr. K. N. Raj, one of our distinguished economists, to critically examine the present structure of direct taxation in agriculture and to suggest specific measures for the mobilisation of fiscal resources through taxation of income and wealth in this sector.