Monetary Policy for the Busy Season

planning for economic development). The mildest form of controls being advocated is the reporting-system employed during the early part of the Korean War. Because of the ineffectiveness of this system wage and price controls were slapped on the economy after January 1951. Under the reporting system 200 companies, that carry on 50 per cent of nation's business, regularly and frequently report to the Administration wage, price and operations in order to enable the Government to determine the trends and movements AS NOVEMBER approaches, the question of the monetary policy for the busy season becomes an important issue for discussion. This was not so till 1964, until when the Reserve Bank more or less stood by to provide, at a fixed and to some extent cheap rate, the funds required by banks to finance the seasonal increase in agricultural supplies, subject to selective controls (which took the form of restrictions on the volume of lending against specific commodities). In practice, selective controls did not prove efficient as they could more or less be avoided in the early stages by clean credit and later by replacing the non-acceptable commodity by an acceptable commodity as security.