Hon. Members are also aware that there is a persistent demand for increasing the exemption limit for income-tax. During the budget debate several Members suggested that the exemption limit should be increased to Rs. 7,500 or even Rs. 10,000. There is also pressure on me that I should raise more from direct taxes. It is therefore, difficult for me to reconcile the demand to increase the proportion of direct taxation in a developing country like ours with the demand to give relief to the lower class of income-tax payers. But as I said earlier the direction in which our efforts will have to be concentrated is now quite clear.

The other criticism that was made was that there was no incentive for savings. I have read this argument for decades; it was there even when I was not a Minister, or the Finance Minister. It is a hackneyed argument normally advanced by economic experts and pundits and other people representing big industry. There are two or three factors responsible for this criticism. First of all there are those people who believe that the increase in wealth tax rates will discourage accumulation of wealth. It is one particular class which is trained to accumulate wealth so far.

They had no idea and they never had any training that a time will come when there will have to be some sort of a restriction and control over the accumulation of wealth and they go on complaining that there is no scope for accumulation of wealth and that there is no incentive for savings. If incentive for saving means accumulation of wealth, I do not care for such savings. As far as this group of persons is concerned, I plead guilty to the charge that my proposals are aimed at discouraging accumulation of wealth beyond a point. Most Hon. Members and practically all the organised political parties in the country have given up the ideology of accumulation of wealth through perpetuation of inequalities.

As I said to begin with, at least theoretically, most of them have agreed to this proposition and it is good for this country. The complaint from this particular group that there is no incentive for savings is possibly rejected by the country as a whole. If some people do not have an opportunity to accumulate property beyond Rs. 10 or 15 lakhs, they would be discouraged from saving. That is what they say. But this is the price we should be prepared to pay for the larger benefit of spurring the masses of the people to greater effort and for their cooperation in the task of building up the nation. I have no doubt that this effort and cooperation from the vast majority of the people will not be forthcoming unless extreme inequalities of wealth and economic power are effectively curbed.

Those who believe that there can be no accumulation for society as a whole without any opportunity for a few people to amass vast personal fortunes have certainly not understood the social political undercurrent that runs through developing societies today. There is also a feeling that the increase in surcharge from 10 to 15 per cent in the case of income in excess of Rs. 15000 per annum will reduce the ability of the persons concerned to save. I entirely agree that those who have now to pay more by way of income tax will in all probability reduce their savings to some extent. I do not refute that, but here again, one has to balance this factor against the need of the society to raise some resources for the overall social purposes of development and social welfare. Carried to its logical conclusions the theory that any increase in income tax is not justified because it may lead to some reduction in personal savings could amount to a plea for no taxation whatsoever.