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

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All-Round Financial Slackening

All major indicators of financial sector activity - commercial bank credit, capital market equity and bond issues, sanctions and disbursements of development finance institutions and foreign capital inflow - confirm an economic slow down in 2000-2001.

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Depressed Scene

At the end of the fiscal year 200001, all major indicators of real and financial sector activities portray signs of lacklustre performance. Commercial banking data, now available for the full financial year, show a deceleration in nonfood bank credit growth to 14.3 per cent in 200001 from 16.5 per cent in the previous year. When banks’ investments in commercial instruments are taken into account, the deceleration is much steeper from 17.8 per cent to 14.9 per cent. More significantly, as shown in Table 1, the slowdown in nonfood credit expansion occurred rather sharply in the second half of the year, that is, after signs of industrial recession became more pronounced.

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