The Economy- Growth Potential Goes Abegging

The Economy THE expansion of money supply with the public in the current financial year so far deserves to he noted. Data available from the Reserve Bank upto July 9 show that money supply has expanded by as much as Rs 1,175 crores or 9.3 per cent since end-March, against an increase of only Rs 742 crores or 6.3 per cent in the comparable period of the last financial year. Particularly disquieting is the expansion in the currency component of money supply with the public, which has risen by as much as Rs 690 crores against Rs 388 crores last year. During the whole of 1975-70, currency had expanded by Rs 350 crores and money supply by Rs 1,130 crores; the expansion in both was thus less than what has already occurred this year in a period of a little over three months. In the twelve-month period ended July 9, money supply expanded by 12.0 percent or Rs 1,545 crores, compared with an increase of only 6.4 per cent or Rs 745 crores in the preceding twelve months. The expansion in currency was Rs 660 crores against only Rs 92 crores in the preceding twelve months.