Overestimating Saving

'Overestimating' Saving IN indulging in the familiar sport of RBI- bashing through your edit 'Overestimating Saving' (June 15), you gave a misleading picture to your readers that the methodology followed by the Reserve Bank of India (RBI) while presenting the household saving in terms of bank deposits for 1994-95 was a deviation from the past procedure and that, as a result, there was an ovcrestimation of saving. The argument implied in the edit is that differences in scheduled commercial bank deposits as between the last days of March (i e, March 31) should be taken, and the household sector's holdings of such deposits be worked out on the basis of survey results. The RBI did exactly follow this procedure till 1987-88. But in 1988-89, the procedure was changed and the differences in the deposits as recorded on the last reporting Fridays (LRFs) of March were taken for working out the household sector's holdings of deposits. This was done because data available as of LRF were found to be more reliable. This was first effected in the Reserve Bank's Annual Report for 1988-89. Since 1988-89 the methodological procedure implied in this switchover to LRF was followed without any deviation. Had the editor consulted the director of the EPW Research Foundation, who was himself associated actively with the said Annua! Report and subsequently with the area of household sector's saving in financial assets till his voluntary withdrawal from the RBI, the readers would have been spared the misperceptions that your edit has created.