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

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Monetary Policy Hampered by Fiscal Inaction

The relatively credible programme of fiscal correction presented in the 1999-2000 budget, combined with low inflation and reduced credit offtake, has emboldened the Reserve Bank to try to bring down interest rates. However, the attempt is unlikely to revive industry in the absence of a sizeable increase in public expenditure and rapid expansion of bank credit.

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