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Indian Economic Policy

Notes the state legislation reveals that in some states, it is designed to be toothless. In several states, on the
completion of the first term, for several years, the Lok Ayukta was not appointed. A study made by
Shukla and Singh (1988) observed : “While the institution has potentiality and scope for operation, it
may or may not be allowed to operate freely by other structures/systems of the society.”

Another study made by Vinod Pavrala (1996) revealed that though a large number of
complaints were received about corruption cases in Andhra Pradesh which clearly
indicated that the people in general were eager to avail of the opportunity to combat
corruption, but since the recommendations of the Lok Ayukta were routinely ignored by
the government, people became disillusioned with the effectivity of the Lok Ayukta to
deal with cases of corruption.

The package of measures discussed above are all steps in the right direction within the socio-economic
framework of the mixed capitalist economy. Their success depends on the sincerity and vigour with
which they are implemented. However, if the State apparatus means business, black money can be
brought within manageable limits. But if a symbiotic relationship develops between the capitalist classes,
the bureaucracy and political structure in the country, as it obtains today, the chances of controlling the
menace of parallel economy appear to be bleak. The crucial issue, therefore, is the nature of state structure,
its attitude towards black money, the degree of tolerance and connivance with black money operators.
Self -Assessment
1. Choose the correct options:
(i) An outward shift of the production possibilities frontier
(a) is always a parallel shift (b) does not relate to the state of the economy
(c) reflects economic growth (d) reflects economic decline
(e) reflects economic stability
(ii) Society's production possibilities frontier
(a) demonstrates that, although resources are scarce for individuals, there is no problem of
scarcity for society as a whole
(b) is based on unrealistic assumptions and therefore has no value as an economic tool
(c) helps explain the immense complexity of the real economy
(d) is based on simplifying assumptions, but is still useful for illustrating scarcity, opportunity
cost, and economic growth
(e) is based on the assumption that technology is constantly changing
(iii) Which economic question does the decision to give all of the butter the economy produces to
the homeless answer?
(a) How to produce?
(b) Who has an absolute advantage in butter production?
(c) For whom to produce?
(d) Who has a comparative advantage in butter production?
(e) What to produce?
(iv) The U.S. economy is best characterized as
(a) a command economy (b) a mixed capitalist economy
(c) socialism (d) pure capitalism
(e) market socialism
(v) Which economic concept does the expression "time is money" reflect?

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