Russia Change with Continuity

behind the procedure presently followed by the RBI could be that once the bill is re- discounted, the RBI becomes 'holder in due course' and in the process of rediscounting it has stepped into the shoes of the original holder. RBI offers a sort of refinancing facility earlier extended by the banks to their constituents. As such the 'prior party' to a negotiable instrument is liable to the ' holder in due course1. Of net bank credit to the government and deficit financing, the author's impression that one rupee coins (central government currency) are not considered in the measurement and computation of net RBI credit to government is incorrect (see p 30 of Report of Money Supply Working Group). A portion of government currency (i e, small coins) to the extent to which it is held outside RBI, is, however, not included in RBI credit as the small coins are distributed through small coin depots in exchange transactions and their issue to the public directly does not constitute 'deficit financing'. In exchange transaction the level of currency does not undergo any change but only the composition. The need for making a distinction between 'old' issues and 'current' issues of government securities to arrive at the current year's deficit financing as measured by RBI credit to government, as suggested by the author, was never in question but perhaps the RBI could not give effect to it in the monetary statistics compiled by it because of difficulty in making such a fine distinction at the operational level. The findings of the penultimate chapter on interaction of the determinants of money stock are the same as those thrown up by earlier studies, such as a decline in the influence of the money multiplier because of significant rise in reserve requirement and concomitant increase in the contribution of reserve money to change in money supply, etc. The author concludes the book on an optimistic note that the role of the multiplier is likely to increase in future considerably because the currency ratio might fall due to the popularity of alternative financial assets. Will his expectation materialise, given, on the one hand, the huge size of black money, the growth of which is relentlessly encouraged by the kind of social structure and widespread political and bureaucratic corruption, and dis- intermediation on the other. The author has endeavoured to add value to his book by incorporating 27 appendices containing statistical data. The tables have not been coherently and thematically presented. Some are irrelevant, e g. Tables X and XI. and are not referred to in the text. The period coverage of statistics on different dimensions is not uniform. A few individual years are left blank in many tables. The veracity of the data presented in Table XXV is suspected as figures do not tally with those given in official publications such as the Report on Currency and Finance and the RBI Bulletin. In short no attention has been paid to neat and accurate presentation of authentic data.