The Indian Journal of Economics January 1952

Half a century later his French pupil and commentator J. B. Ray writing under the neuence of the ideas of the American and French Revolutions laid in the immediate context of the effects of the Industrial Revolution on the economies of Western Europe thus defined he scope of fiscal policy : The very best of all plans of finance s to spend little and the best of all taxes is that which is least [...] the.economic situation of the world particularly since the first world war have made the practical application of that policy possible.: (a) the emergence of the managed currency system as a result of the disappearance of the rigid go:d standard of the nineteenth century ; (b) the nationalization of central banking and (c) the expansion of the public sector in national economies particularly si [...] As a result of the operation of the first two factors a now and effective technique of monetary control has been evolved and a national government to-day is in a better position to control the monetary transactions of the economy through its central bank policy ; the significance of the third development lies in the fact that owing to the expansion of its activities the financial operations of [...] To view in its proper perspective the role of fiscal policy in relation to the requirements of the Plan it is necessary to set it in the context of (A) the broad objectives of the Plan ; (B) the various financial sources indicated for raising the amount of annual investment and the fiscal measures proposed for tapping them ; and (C) of the economic monetary and legislative measures suggested for [...] Considered from every point of view the Commission's assessment of the financial resources is realistic and quite within the 'taxable capacity' of the economy if that term is defined to mean the entire income of the community whether derived within the price mechanism in the form of money receipts or outside of the price mechanism in the form of directly con-. sumed utilities and services.