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

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Law-Charade of Free Legal Aid

January 5, 1980 pensity, without examining the nature of the improvement in savings, is clearly questionable. In 1978-79, the entire increase in the proportion of savings occurred on account of increase in the household sector's savings in the form of financial assets. And the share of 'currency' in the total financial assets of households shot up from 9.9 per cent in 1977-78 to 19.8 per cent in 1978-79 (from Rs 693 crores to Rs 1,512 crores). The increase in currency holdings took place because there were repayments under the Compulsory Deposit Scheme to the extent of at least Rs 500 crores (in gross terms); the repayments were to the working class whose 'savings propensity' could not be said to have gone up as a result. A part of the increase in currency holdings could also have been due to the disruption of the banking system. The point is that it is difficult to explain why the household sector's preference should have moved in favour of currency so sharply, except by reference to such extraneous factors. In any case, to regard the rise in the savings ratio in a single year as an improvement in the savings propensity is clearly questionable.

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