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

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