Articles by B V Rangarao

Anomalies in Drug Prices and Quality Control P S Agarwal P K Ramachandran B V Rangarao Drug price indices in the developed countries have been falling when static groups of drugs are considered, though for the industry as a whole the price indices have risen due to the discovery and introduction of new drugs. In India, however, the drug price index calculated on the basis of the prices of a static group of drugs had risen by 41.9 points by 1970-71 with 1961-62 as the base. The rise was sharp after 1965-66 which, by a remarkable coincidence, was also the period when the Government of India referred the costs and prices of a few selected drugs to the Tariff Commission for study. The highest annual increase of 12 points occurred in 1970-71 with the announcement of the Drug Prices Control Order.

of 'productive' activity. If the rates for organised trade or industry are jacked up to say 30 per cent because some sectors therein earn as high as 100 per cent return, the activities will still remain profitable and thus continue while others, though 'productive', may have to shut down. It is doubtful if selective increase for a particular branch of a given sector, e g, textiles within 'Industry', can get over this problem. It is just possible that if interest cost goes up beyond a point, textile mills will step up the production of superfine cloth in preference to the coarse variety because the rate of return on the latter is no longer remunerative. To expect that the rate structure can be adjusted so neatly as to leave certain lines of production within each sub-sector unaffected, while effectively netting the surpluses from others is to place too heavy a reliance on the manoeuvrability and efficacy of monetary instruments. These objections would apply a fortiori to a hike in lending rates of the magnitude suggested by Boswel.4 There may be room for pushing up the interest structure generally but a decision in that regard should be based on considerations of the major aims of monetary policy, and market trends as well as profit maximisation of the banks and not the narrow requirements of a specific subsidy.