Some Implications of Economic Strategy Underlying 1985-86 Budget

Underlying 1985-86 Budget Prabhat Patnaik The Budget for 1985-86 espouses a new economic strategy which, it is claimed, will accelerate the rate of growth of the economy. The author argues that the credentials of the strategy in this regard are highly dubious. If anything, it entails contractionary possibilities in the short or even medium term. Additionally, it is almost certain to have adverse balance of payments implications, necessitating larger foreign borrowings. It also entails in certain situations greater inflationary possibilities insofar as larger Budget deficits are resorted to for financing tax concessions.