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

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Kerala- Loss through Bickering

What is more, the full impact of the busy season on bank credit is yet to be felt. By the end of the financial year, there may well he a further credit expansion of around Rs 800 crores for non-food purposes. Together with the increase in bank credit to the government, this could mean that the rate of expansion of money supply his year might once again be in the 14-16 per cent range. There are, on the other hand, few factors which are likely to counteract the effect of the staggering increase in money supply. The growth in banks' time deposits is running at about 13.5 per cent, the same rate as last year. Foreign exchange assets are no doubt fairly high, but any use of them on government account is likely to be financed by borrowings from the Reserve Bank. Use of foreign exchange assets has been negligible so far. Unlike during this period of the last financial year when foreign assets showed a fall of Rs 160 crores, this year there has been a rise in foreign assets of about Rs 80 crores.

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