But this situation, while currently favourable, still does not allow for much complacency on the external front. This is because non-oil imports are likely to increase again because of the removal of quantitative restrictions on 50 per cent of imports next month along with the reduction in peak tariff rates, while exports have not been dynamic enough to cover this contingency. Meanwhile, the new policies which have effectively liberalised capital account transactions could increase financial fragility as well.
 
Inflation - as measured by the Wholesale Price Index - was contained over the past year, falling to one of the lowest rates over the past two decades at 3.3 per cent. While this is described in highly self-congratulatory tones in the Survey, the main factor behind this has been the international deflation which has seen the value of both primary and secondary goods in world markets fall over 1999. As Indian prices have moved closer to world prices for a range of goods, this deflationary pressure has also similarly been passed on.
 
However, the price index which matters for the rural poor - the Consumer Price Index for Agricultural Labourers (CPIAL) does not show such a low rate of increase. The main reason is the continuing increase in food prices, with cereal prices in India going up by 9 per cent over 1999-2000 despite the international price fall. It is interesting that despite the behaviour of this price which affects poorer groups directly, the Economic Survey feels that prices of essential items have been contained.
 
The rise in food prices, which was a marked feature of the 1990s as a whole, was definitely policy-induced. The progressive freeing - and even encouragement - of agricultural exports has caused Indian cash crop prices to rise to close to international levels. Simultaneously, Minimum Support Prices for farmers have been increased, and along with this, the attempts to cut the food subsidy bill have meant that issue prices of foodgrains under the Public Distribution System have also gone up. In consequence, foodgrains, especially cereals, have cost much more for consumers. The amazing thing is that this adverse process for grain consumers is not even resulting in cultivators becoming better off, because of increases in their costs and greater threat of competition from imports.
 
Food prices have played an important role in determining the extent of absolute poverty, along with the availability of productive employment opportunities. Thus the evidence from national sample Surveys that the incidence of rural poverty has not decreased and is likely to have increased over the 1990s, comes as no surprise. But the Economic Survey is especially disingenuous on this matter. It refers only to the "large" NSS sample survey of 1993-94, even though the "thin samples" conducted annually until the first half of 1998 are statistically valid for identifying all-India trends. It admits that these smaller samples "do not show clear positive trends in poverty reduction" but allocates very little space or even concern for this most pressing issue.
 
The question of livelihood of most citizens is also given short shrift. The deceleration of organised employment in the 1990s is well known. But the Survey completely ignores the even more distressing evidence on employment generation which emerges from the NSS thin samples, that non-agricultural employment generation has been substantially lower over the 1990s than it was in the previous decade. The point that emerges from these important facts, which are hardly developed in the Survey, is that the entire economic strategy of the 1990s has been one which has failed in terms of generating productive employment and reducing poverty.
 
Since these are the most pressing problems for the bulk of our citizenry, it would be expected that a democratic government would see these issues as the main priority areas for policy. Instead, the Survey, which spends some time listing the government's aims and priorities, identifies a very different set of issues. Thus, the most important policy item on the agenda of this government is apparently the management of public finance, including possibly a "fiscal responsibility legislation" which would further constrain the state's ability to engage in productive and welfare expenditure, and more downsizing of government.
 
All this reinforces the perception that this government puts the interests of finance, both domestic and international, well ahead of the material concerns of the bulk of its citizenry. But this is definitely not an unavoidable economic strategy determined by current conditions. Rather, it is essentially a political choice reflecting relative power configurations and the control of particular classes and groups over the apparatus of government. Changing political equations could still alter this undemocratic state of economic affairs.