NRI DEPOSITS-Policy Failure

Entering the Tunnel FOR the optimism they exuded, some of finance minister Manmohan Singh's remarks on the state of the economy at his press conference in Madras on November 1 were reminiscent of his comment, after the two-stage devaluation of the rupee in July, that the foreign exchange crisis was now a thing of the past. In Madras the finance minister referred to the rise in the level of foreign exchange reserves to the equivalent of about Rs 6,000 crore, in view of which, he said, the government would now proceed in the next few weeks to ease the curbs on imports. He also drew attention to the decline in the annual inflation rate from 15.6 per cent which it had touched in September to 14.7 per cent and expressed the hope that by the end of the year inflation would be down to single digit level- Further, in the light of the trend of prices, as he saw it, he held out the hope that it might become possible to reduce interest rates which had been raised quite sharply as part of the monetary policy changes announced at the beginning of October. In sum, the finance minister was suggesting that he was beginning to see the light at the end of the tunnel as far as the economy was concerned.