Directed Credit Programmes-A Critique of Narasimham Committee Report

A Critique of Narasimham Committee Report D Narayana THE Indian banking and financial system has made commendable progress in the last 20 years. A measure of this progress is in its geographical spread and reach of sectors of production and segments of population, which the normal growth of the system would not have touched. Behind such spectacular growth lay the directed growth of the system. Now, in the 90s, the Narasimham committee has recommended the doing away with of such directed growth and has argued for the free play of market forces. This, the committee argues, would arrest the erosion of "the real value of and return on the savings entrusted to (the financial institutions] and restore "depositor and investor confidence".