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

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Savings, Risk Capital and Public Borrowing

 Savings, Risk Capital and Public Borrowing Amal Sanyal FROM the promise that we have a large volume of savings currently, two conclusions seem to be derived in policy-making circles rather wishfully. One is that a substantial amount of additional resource can be raised through public borrowing with only marginal increase in the yield rate of government papers, and the second is that the flow of risk capital directly from households to corporations can be significantly increased by only properly reorganising the functioning of the stock market. If true, both of these will ease the government's financial problem, the first directly with larger public borrowing and the second indirectly by reducing the pressure on public financial institutions to provide risk capital. Some recent experiences in the capital market can throw some light on these two suppositions.

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