And what exactly the government proposes to do with the money realised by disposing off such lucrative PSUs? The previous record is not very encouraging in this respect. Simple common sense would tell one that money raised by asset sales should be utilised by liquidating outstanding liabilities. In this case the proceeds from the sale of PSUs should be used to retire public debt. (Interest payments on public debt are the single biggest head of public expenditure in the country and hence the single biggest source of inflationary pressure in the economy). Until now there is no proof that the government is thinking along these lines. The BJP government's way to cut down on public expenditure consists rather in across-the-board cuts in all types of public subsidies irrespective of how these would affect the poorest strata of the society.

All these bring us to the question what the BJP government is doing about the real important issues of socioeconomic development of our country. One does not need to be specialist in theoretical economics to be able to identify the basic constraints in the process of development in India today.

First, in the crucial sector of the agriculture the long run growth rate of output is constrained by the rate of real investment. For quite some time now, the real investment rate in agriculture has been declining in India. The trend started during Rajiv Gandhi's regime and has continued over the years. There has been no reversal of this trend during the past few years.

Secondly, sustained economic development needs a broad demand base. In no country of the world has industrialisation proceeded very far by catering to the demand of the handful of people at the upper end of the income distribution. This is precisely the problem faced by the suppliers of luxury brands of automobiles in India. A broad demand base requires a reasonably egalitarian income distribution. However, neither the inequality of income distribution nor the quantum of poverty in the country has registered a decline. More importantly we have not been able to detect any sign of the government's concern over the problem.

The importance of the degree of inequality of the income distribution as a determinant of the purchasing power of a region has come out blatantly in a recent survey conducted by Business Intelligence Unit, a Bangalore based organisation. The study calculated purchasing power (per million people) of almost all the districts of India. The researchers were surprised to find that Calcutta came out to be the richest district or the district with highest purchasing power in India. It scored past Bombay, Bangalore, Delhi and all other districts of the country.

The explanation is, of course, that while per capita income in Calcutta is lower than that in many other districts, Calcutta had a lower inequality of income distribution i.e. purchasing power was more evenly distributed among the masses.

Going back to our list of constraining factors affecting the economy, we should not forget about investment in the social sectors. Labour productivity in a country like India is constrained particularly by the availability of adequate health care facilities, especially primary health care, and educational facilities, particularly primary education. However in the BJP government's planning and budgetary exercises, one notices similar apathy towards these vital sectors as was observed during the Congress regime. A shameful piece of information in this respect is that even some of the most underdeveloped countries in Africa allocate a significantly higher percentage of the focal public expenditure towards these sectors than the Indian government does.

Theses are the real issues of concern in the economy. In the policy pronouncements of the BJP government there is no indication as to what plan of action it proposes on these issues. In reality the government's thinking seems to be focussed on the one point programme of rejuvenating the stock exchanges. The entire gamut of economic policies over the past few months, from the tax benefits to holders of units of UTI to the reduction in the rates of interest can be seen to be geared to this objective.. This would make equity finance more attractive than loan finance so far as the producers are concerned. While there is nothing wrong in seeking a recovery in share prices, it should be emphasised that this has little to do with the basic issues referred to above.