State Loans Do Well

Micawbers of Mint Road THE annual report of the Reserve Bank is disappointing in at least two respects. It fails to provide an adequate analysis of the factors responsible for the events (or non-events) of 1967-68. And it does not set out measures needed to bring about economic revival in the coming year. It does record, though, the well-worn description of movements in the economy during the past year. A good monsoon led to a rise of 29 per cent in agricultural output but industrial output remained sluggish. The wholesale price index declined but showed an upward trend from March 1968; the decline was not reflected in the cost of living index. Central and State government expenditure remained more or less stagnant in 1967-68. Assistance sanctioned and disbursed by the financial institutions tended to decline. There was an improvement in the balance of trade, caused mainly by declining demand for imports; the burden of debt-servicing has increased on the other hand. Finally, the report refers to various official measures, eg, lower Bank rate and liberalisation of credit, taken to stimulate the economy.