It is true that in a number of cases, the performance of the public sector enter­prises has not been in conformity with our original expectations. However, in a society committed to growth with social justice, the real issue is not whether we need an expanding public sector or not. There clearly can be no going back on our previous com­mitments in this matter. The challenging task is to devise ways and means to ensure that the public sector enterprises in fact effectively discharge their functions in the framework of an over­all strategy of accelerated growth with social justice. There is clearly a need for some fresh thinking about the management of the public sector enterprises.

It has also to be recognised that in societies where the bulk of national savings continue to originate in the private sector, there are limits to which one can plan for a reduction in in­equalities in income and wealth. It is for this reason that our plans lay considerable emphasis on raising the rate of public savings. Because of unexpected increases in non-developmental outlays — and these include outlays for such essential purposes as refugee relief in 1971 and relief for drought affected areas —the savings potential latent in the massive tax effort of recent years has unfortunately not been fully realised. Fiscal policy has an important role to play in raising resources for development as well as in promoting greater social justice. In the past, its contribution has been limited, partly by the fact that the existence of a large number of loopholes in our tax laws and adminis­trative laxities led to a considerable amount of tax evasion and avoidance. These loopholes are now being plugged so as to ensure that our tax structure becomes an effective instrument for mobilising resources for development as well as in promoting greater social justice. I am aware of the criticism that our tax rates are having an adverse effect on incentive to work, save and to bear risks. To the extent possible, every effort is being made to preserve a reasonable degree of incentive for enabling citizens to undertake socially useful activities. However, I would like to point out that the desirability of any given set of incentives can­not be assessed in isolation of the basic harsh fact that nearly 40 per cent of the population in this country continues to live below the poverty line. Those who are always clamouring for incentives for the few must not forget the unfortunate many who do not get even two square meals a day.

In the course of this analysis, I have tried to share with you some of my thoughts on how growth and social justice can be combined in a development strategy. It was not my intention to suggest that we have readymade solutions for all our problems. That clearly is not the case. While the overall direction is clear, there is still need to work out a more effective policy frame­work. We would need to have a fresh look at many of our exist­ing policies and programmes. In the affairs of individuals as well as of nations, there is often a temptation to continue along well trodden paths. The status quo has no doubt the advantage of reality while the future is full of uncertanties. Nevertheless, considering the vast dimensions of poverty in India, we must think and plan boldly.