Articles by Deepak Lal

There have been significant financial sector reforms through the 1990s. One of the major policy changes affecting the financial markets has been reduction in government's recourse to claims on loanable funds through statutory liquidity ratio as well as high levels of Cash Reserve Ratios. The central government has switched to market borrowing to finance its fiscal deficit on a larger scale than before. There is a general move towards market determined rates and flows in the financial sector. One area where administered rates are still important is the small saving instruments. The government sets these interest rates and mobilises funds for meeting the fiscal deficits at the centre and more so at the state level. If these rates were to be determined by the markets, what would happen to the interest rates in general. One argument is that the small saving rates act as a floor to the deposit rates of the banking sector and hence also determine the lending rates. If the overall balance of demand and supply of loanable funds is such that interest rates can be lower, the small saving rates do not let that emerge. Further, as interest rates decline, there would be significant gains in economic growth. This paper is an attempt to examine this viewpoint. We develop a monetarist model of the economy and assess the implications of alternative methods of financing the fiscal deficit of the government, central and states combined. The results support the view that overall interest rates would decline if the small saving rates were to be liberalised but the gains in economic growth would not be dramatic.

Rural Poor in India Deepak Lal A number of authors have asserted that the green revolution, despite its marked output-increasing effects, has not benefited the rural poor. This is taken as evidence of the incompatibility between red ressal of rural poverty and agricultural growth within the existing institutional framework. The implication is that, without fundamental institutional reform, alleviation of rural poverty is infeasible.

Review of Agriculture June 1973 the price policy of Kharif Cereals for 1965-66 season, p 47.
2 lbid, p 47.
3 Report of the APC on minimum prices for Wheat and Gram for the

There is a marked relationship between agricultural incomes and availability of water in the Ahmednagar district of Maharashtra. Ahmednagar being a dry area, the farmer has to depend on irrigation for assured water supply on which his ability to take to improved technology depends.

Deepak Lal Indian foreign policy has been marked by a complete lack of ideological thinking, and, in fact, has been very pragmatic. It has been based on a coherent and valid model which embodies value assumptions that the author strongly supports. It would be a great pity therefore if, bewitched by the mechanistic models of the so-called realists, Indian foreign policy were to shelve the internationalist value assumptions in its model.