ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

T K VelayudhamSubscribe to T K Velayudham

Ad Hoc Treasury Bills System-Rip van Winkle Wakes Up

But now after the latest developments the charge of failing to intervene in the mainstream arena can well be levelled against the CPI(M). Politically also, the IPF is contesting on a different plank of defeating the B JP and the Congress, isolating the SP-BSP combine and ensuring victory of left democratic candidates. In the run up to the polls, the IPF-CPI(ML) meetings in Benares, Ghazipur and Ballia attracted large numbers which made independent observers comment .about a resurgence of the left in the region after the 60s, Similar events are taking place in Allahabad where in a predominantly city constituency with an overwhelming Muslim population, the IPF is DELIVERING the 10th M G Kutty Memorial Lecture in Calcutta on September 17, C Rangarajan, governor, Reserve Bank of India, stressed the urgent need for moving away from the system of issue of ad hoc treasury bills and the consequent monetisation of the budget deficit. The gov- ernor also recalled the enabling and not mandatory provisions of the RBI Act which do not require the RBI to finance unlimited deficits of the government. The governor also pointed out that a seemingly innocuous arrangement (of creating ad hoc treasury bills to restore government cash balances whenever they dropped below Rs 50 crore opened the floodgates of automatic monetisation, which changed the entire course of monetary history in the subsequent 40 years.

Gilt-Edged Market That Was

T K Velayudham The Gilt-Edged Market in India by R K Seshadri; Institute for Financial Management and Research, Madras, 1991; pp 254 + v, Rs 175.

Regional Rural Banks and Rural Credit-Some Issues

Some Issues T K Velayudham V Sankaranarayanan Regional rural banks (RRBs), an innovative feature of Indian banking, have in the last few years been at the centre of controversy. The issues involved in the controversy include the non-viability of the RRBs and the question of parity of their staffs' pay scales and service conditions with those of commercial banks. One influential view that emerged advocated merger of the RRBs with their sponsor banks. However many other important issues involved have been, by and large, glossed over. This paper takes stock of the role and problems of these banks in perspective and draws inferences to aid policy formulation.

Money Matters

of 'shop-floor' level experience in TC acquisition, which is consciously omitted in the study, and far too much dependence on 'board room' level chit-chat. Lall, like most non-resident Indian researchers and foreigners with the 'proper' connections has obviously easy access to senior managers, senior civil servants and even some businessmen and interviews with them have clearly helped shape the book. Less fortunate Indian researchers know the problems they have to face to secure interviews and even published documents from both government officials and private sector managers.

Banking and Economic Development

Banking and Economic Development T K Velayudham Banking and Economic Development published by the Indian Institute of Bankers, Bombay, 1989; pp 160 + vii, price not mentioned.

Credit Policy Shift Away from Regulation

The Reserve Bank's credit policy announcement of March 27 goes beyond conventional slack season considerations. Many of the measures seek to lay the foundation for future policy and therefore their long-term implications call for careful analysis.

Bank Profitability and All That

blems and Prospects of Regional Rural Banks (8 papers) and (d) Changing Structure of Money and Capital Markets in India (7 papers). Each of these subject groups is accompanied by observations of special invitee and of the chairman of the session. At the end of the volume (under valedictory section) the rapporteurs' reports are presented. The BTC report contains five parts and of these parts 11 and IV are relevant for our purpose, as these contain, respectively, subject papers, summary of recommendations. The subject papers contained in Part II are accompanied by group reports and gist of discussions on the subject.

Lilliputs and the World of Finance

immediate cut in defence expenditures is also unlikely. Abel Aganbegyan's book undoubtedly will be of great help to understand the problems of the Soviet economy and attempts of the present leadership to overcome these problems. Some of these problems are relevant to the Indian economy: for instance, the inefficiency of our public sector.

Monsoons and the Economy

Monsoons and the Economy T K Velayudham Reserve Bank of India, Annual Report, 1986-87, September 1987, pp 105, unpriced. REPORTING in 1925; the Royal Commission on Indian Agriculture described the Indian economy as a gamble on the monsoon. Adapting this description to a more specific problem, a finance member of the Viceroy's Council of pre-independence days (perhaps, Sir Jeremy Raisman) observed that the Indian budget was a gamble on the monsoon. Though much time has elapsed since then, the present situation in the country suggests that the gamble on the monsoon persists regardless of whether it is the economy or the budget. No doubt, as a result of planned development, improved irrigation facilities and improved agricultural production techniques, vulnerability of agriculture to the caprices of the monsoon is somewhat reduced. But the five-year cycle of the monsoon seems to be deteriorating

Specialised Financial Intermediaries in Development

Specialised Financial Intermediaries in Development T K Velayudham Banks and Specialised Financial Intermediaries in Development by Philip Wellons, Dimitri Germidis and Bianca Glavanis; Development Centre, Organisation for Economic Co-operation and Development, Paris, 1986.

MONEY MARKET-Missing the Wood for the Trees

MONEY MARKET Missing the Wood for the Trees T K Velayudham ONE of the few fall-outs from the Sukhamoy Chakravarty committee report on the working of the monetary system, is the report of the working group on the money market, which has now come to be known as the Vaghul committee report. In pursuance of the Chakravarty committee's recommendations relating to the development of the money market, the Reserve Bank of India (RBI) appointed on September 5, 1986, a working group to examine the possibilities of enlarging the scope of the noney market and to recommend specific measures for evolving money market instruments. The specific terms of reference of the working group were: (i) to examine money market instruments and recommend specific measures for their development; (ii) to recommend the pattern of money market interest rates and to indicate whether these should be administered or determined by the market; (iii) to study the feasibility of increasing the participants in the money market; (iv) to assess the impact of changes in the cash credit system on the money market and to examine the need for developing specialised institutions such as discount houses, and in this context to examine the interaction between the inter-corporate market and the expanded money market; and (v) to consider any other issue having a bearing on the development of the money market.

Narration without Analysis and Assessment

Trend and Progress of Banking in India: 1985-86; Reserve Bank of India, Bombay, January 1987; pp 223. THE Reserve Bank of India makes available to the public information relating to banking in three instalments in the course of a year, whether it is July to June or April to March. The first comes in the form of a small section in Part II of the annual report which is a statutory report in the sense that the report is submitted to the government of India in terms of section 53(2) of the Reserve Bank of India Act, 1934. The second instalment becomes available in the form of the report on Trend and Progress of Banking in India, also a statutory report, which is (unlike the annual report) devoted exclusively to banking. The third instalment appears as a chapter in the Report on Currency and Finance, which is a nonstatutory report and which is regarded, for this reason, as a staff report providing detailed information about the economy. The difference as between the three reports lies in the treatment of the subject of banking development and policy. While the annual report, which precedes the other two reports, gives a brief account of developments in banking, the other two reports elaborate on these developments in great detail.

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