ervices is to be
allocated among the various sectors and levels of the economy, and the
State Committee for Prices will be responsible for the correct
application of the law.

In order to prevent further abuses in the formulation and changing of
prices, a state price control inspectorate is to be created within the
State Committee for Prices with power to supervise price control
agencies in each county. Penalties for infractions of trade regulations
have been increased to 2,000 lei, and persons guilty of price
irregularities will be subject to prosecution under sections of the
penal code on profiteering and fraud, which provide for imprisonment of
from six months to seven years.

The intricacy of price formulation, the complexity of the price law
(which contains 157 paragraphs), and disagreement among officials about
the efficacy of some of the law's provisions suggest that the new
measure may not be the final answer to the country's price problems. The
determination of the authorities to retain firm control over prices and
not to allow market forces to play any significant role in price
determination, however, was made clear in a statement by the chairman of
the State Committee for Prices to the effect that the building of
socialism cannot be directed by transferring the leadership and
decisionmaking to some self-regulating mechanism or to instruments that
cannot be controlled.

BUDGET

The annual state budgets are more comprehensive than budgets in Western
countries because they also cover economic activities that are the
province of private enterprise in the West. Information on the manner in
which budgets are formulated is not available, except that they are
closely related to the annual economic plans and are prepared under the
direction of the Ministry of Finance. Budgets must be approved by the
Council of Ministers, the PCR, and the Grand National Assembly. The
consolidated budget is divided into a central and a local budget; the
local budget is roughly one-fifth the size of the central budget.

Official statistics on the budget are deficient in that only summary
data are published on the major elements of revenue and expenditures and
the source of one-third or more of the revenue is not disclosed. The
published data show a small budgetary surplus each year, regardless of
the vicissitudes of the economy and unforeseen emergency outlays.
Information is not available on budgetary performance in 1970, when t