Viswanath Pilla
Moneycontrol News
The Union budget of 1973-74 is regarded Black Budget, was marked by massive fiscal deficits, peak personal tax rates and nationalization of coal and insurance, as the government of the day doggedly pursues socialist policies.
The budget presented by Maratha strongman Yeshwantrao Chavan comes at difficult economic phase of post independent India.
The failure of the monsoon in the summer of 1972 and subsequent severe drought and scarcity conditions, inflation and lingering Bangladeshi refugee problem and rehabilitation of people in war-affected areas an outcome of India-Pakistan war in 1971 have worked in tandem complicating things for the government.
The wholesale prices index during the period April 1972 to the end of January 1973 registered an increase of 9.1 per cent, as compared to an increase of 3.7 per cent during the corresponding period of 1971-72.
The government expanded of spending on drought relief measures and improving agricultural productivity. To tackle inflation - the government decided to pursue demand management, increased production of basic wage goods, and the strengthening of the public distribution system.
All these measures have ballooned the overall budgetary deficit will still be Rs 550 crores.
「A deficit of this order, despite large scale additional resource mobilisation, was inescapable due to the extremely difficult situation caused by the drought and the resultant shortfall in food grains production involving unexpectedly heavy spending on drought relief and on the emergency agricultural production programmes,」 Chavan said defending the deficit in his budget speech.
Chavan further said 「I believe that a solution which seeks stability by cutting down expenditure which adds to the productive capacity of the economy is in the long run self-defeating. In an economy where there is considerable unemployment such an approach would aggravate the inequitable distribution of income between those who are fully employed and the unemployed.」
The master stroke in 1973 budget was nationalisation of the general insurance companies, Indian Copper Corp and coal mines. The government provided Rs 56 crore for this purpose and said that this done to maintain uninterrupted supply of coal with the growing demand for coal in various industries like power, cement and steel at the time.
It also said it believed that the interest of mine workers would be best served in a government-run set-up.
In 1973 budge - the highest tax rate applicable to an individual could have gone up to an astronomical level of 97.50 per cent. There were 11 tax slabs, with rates from 10 to 85 per cent.
本文來源：http://www.moneycontrol.com/news/business/economy/budget2018-high-fiscal-deficits-regressive-taxes-and-nationalisation-mark-1973-black-budget-2496047.html