Tryst with destiny, planning and deficit financing

Money Control | May 23, 2020 at 4:25 AM
  • The media is rife with discussions on whether and how the RBI should monetise the government’s deficits.
  • RBI Governor B Rama Rau and Deputy Governor Ram Nath agreed and surprisingly delegated the decision to create ad hoc Treasury bills to Reserve Bank’s Manager in Calcutta and its Secretary in Bombay.
  • In terms of reserve money or base money created by the central bank, net RBI credit to government rose from 83 percent of reserve money to 92 percent in 1984.