|Update on Indian Economy|
Dr. Y. V. Reddy, Governor, Reserve Bank of India
|From L to R: Dr. Y. V. Reddy (Standing), Governor, RBI, Dr. Raj Kaipla, Director & Chief Editor, Academic Foundation, Dr. Arvind Virmani, Director & Chief Executive, ICRIER, Dr. (Mrs.) Uma Kapila, Academic Foundation
Dr. Y. V. Reddy, Governor, Reserve Bank of India, released the book ‘Accelerating Growth and Poverty Reduction: A Policy Framework for India’s Development’ authored by Dr. Arvind Virmani, Director & Chief Executive, ICRIER at India Habitat Center, New Delhi on April 7, 2004. On the occasion of the book release Dr. Reddy delivered an illuminating talk ‘Update on Indian Economy’ in which he provided an update covering development in 3 areas, viz. money and credit, financial markets and external sector and follow-up measures to announcements in the policy statement of November 2003.
Dr. Reddy said that, broad money (M3) aggregate deposit and non-food credit and inflows have been sterlized through open market operations including the Liquidity Adjustment Facility (LAF). Credit expansion has been most in the housing and retail sectors, followed by expansion of industrial credit. Also the priority sector lending has been remarkable. According to him, the financial sector has been steady; foreign exchange market orderly, BOP position comfortable and capital inflows robust overall despite minor cliches the external sector displays a happy picture. The Follow-up measures include two internal groups to recommend policy changes – one on Liquidity Adjustment Facility (LAF) and the other on Instruments of Sterilization, which would enable the RBI to improve liquidity management in the economy, to maintain stability in foreign exchange market and conduct a sound monetary policy. The Banking sector and small-scale sector have been given due importance and have efforts are on to enhance the performance of both.
He stated that development of the government securities market is an integral part of the reforms process and customer services and simplification of procedures and practices are measures that cannot be afforded to be overlooked.