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

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RAILWAYS-Victim of Neglect

the additional demand generated by the large fiscal deficit which could be financed only because of the flood of liquidity then sloshing about in the monetary system. The hanks had also vied with one another to extend sizeable amounts of commercial credit to large manufacturing firms. The situation in 1994-95 was thus very similar to that obtaining in the second half of the 1980s which has been aptly described as a period of 'borrowed growth'. That situation no more obtains now. All indications suggest that there has arisen an acute liquidity shortage in the economy which is more than of a short-term nature. It reflects the fundamental insufficiency of saving to provide a boost to domestic investment. Both domestic saving and investment ratios have slipped in recent years and there has not been any significant rise in factor productivity.

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