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

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Deceleration of Monetary Growth

There was a significant deceleration in monetary growth in 1998-99 if the accruals from the Resurgent India Bonds are excluded. The slowing down was particularly sharp in deposit money growth, attributable to the fall in farm output in 1997-98 and the three-year long industrial stagnation. There was also a decline in income velocity reflecting the slackness in real economic activity.

Failure to Break with Monetarist Approach

The most disappointing aspect of the credit policy statement for 1999-2000 is the Reserve Bank's failure to break with the crude monetarist approach of the past and bring to bear newer perspectives on monetary policy formulation as demanded by the state of the economy.

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