new look had to be given to the fiscal  Fiscal Commission was appointed   emended  a new fiscal policy which may be  ‘developmental It fitted in with tile requirements of a developing economy. fiscal policy is now being used as an instrument of planning. It plays a vital role in economic development.

It must be such as to e courage saving and investment in the country. Fiscal policy can be used as a device to bring about greater investment and increase in income and employment in the country. It call also be used for reducing inequalities of income and wealth in the country which is a desirable objective of economic   development.  developing country has very carefully to workout import policy to be pursued from year 10 year. imports are strictly controlled and quotas fixed. While fixing quotas, the main consideration is the availability of foreign exchange. As a rule, where the country has the capacity to meet entire domestic demand. tariffs arc
increased even up to 100 per cent. When the home industry can meet home demand partially. the imports regulated by quotas. As for exports, export promotion drive is launched. Export incentives arc provided by removal or reduction of export duties and by giving several concessions to exporters. Thus, protection is of special value. say an urgent necessity, for the under-developed and developing countries. We indicate below in a sundry way why so:

Ii) The ‘infant industry argument” specially indicates the need for protection for the developing  countries. But it should he selective or of a discriminating type IiiIii) As Pious observes, “The case fur protection with a view to building up productive power is strong  in any agricultural country which seems to possess natural natural advantages for manufactures”. It is especially the case for under-developed, predominantly agricultural countries like India.

I Protection prescript cs the available  foreign exchange for the tortilla 1’1′ capital equipment, essential raw Millennial, and thE technical know-how so urgently needed to give a  the development process. (III Protection strengthens the economy of  under-developed constrict and ‘ Ihe GNP and eventually results in Ihl’ npall illn ur international trade. 11’1 Protection will strengthen defence  promote self-sufficiency  full employment III  such countries. This is-all ihc more necessary in a world of political.

Protection is an essential ingredient of planned economic development for which control and regulation of all economic activity arc so very necessary. Thus, protection has come to playa vital role in developing economies to bring about rapid economic development.

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