Drop in Centre's borrowing from Reserve Bank

By Our Corporate Reporter

CHENNAI, AUG. 20. Borrowings of the Central Government dropped by Rs. 4,032 crores in the week ended August 11 to Rs. 8,870 crores, while those of State governments were higher by Rs. 283 crores to Rs. 2,772 crores.

On the basis of the latest weekly statistical supplement of the Reserve Bank of India, the increase in bank credit extended by scheduled commercial banks in the current financial year so far up to July 28 was Rs. 21,545 crores (4.9 per cent) as compared to Rs. 3,215 crores (0.9 per cent) in the same period in 1999-2000.

The rise in non-food credit was Rs. 14,428 crores as against a drop of Rs. 2,461 crores. Food credit went up by Rs. 7,117 crores as compared to Rs. 5,676 crores.

On a year-to-year basis, the growth in bank credit was Rs. 85,452 crores as compared to Rs. 49,002 crores in the corresponding period in 1999.

The increase in non-food credit was Rs. 75,135 crores (Rs. 43.968 crores) and in food credit Rs. 10,317 crores (Rs. 5,034 crores).

In the current financial year, the rise in investments in government securities up to July 28 was smaller at Rs. 21,716 crores against Rs. 26,944 crores while other approved securities registered a decline of Rs. 231 crores against Rs. 129 crores in the same period in 1999-2000.

On a year-to-year basis, growth in government securities was Rs. 50,011 crores against Rs. 43,786 crores during 1999. Other approved securities were lower by Rs. 367 crores against Rs. 568 crores.

Reserve money has dropped by Rs. 3,583 crores in the current financial year against an increase of Rs. 2,750 crores (1.1 per cent). On a year-to-year basis, the increase was Rs. 14,635 crores (5.6 per cent).

In the week ended August 11, it has risen marginally by Rs. 780 crores and stood at Rs. 276,731 crores. The net RBI credit to government was higher by Rs. 4,220 crores (2.6 per cent) and stood at Rs. 164,495 crores on August 11. The variation in the current year so far was Rs. 16,231 crores (10.9 per cent) against only Rs. 179 crores (0.1 per cent). The increase on a year on year basis was Rs. 11,776 crores (7.7 per cent).

In the fortnight ended July 28 money supply registered a negative growth of Rs. 2,442 crores (-0.2 per cent) and stood at Rs. 11,69,794 crores. On a year-on-year basis, the growth under this head was Rs. 143,949 crores (14 per cent) against Rs. 162,383 crores (18.8 per cent).

The drop in FCAs from the end of March 2000 was $2.32 billion. Gold holdings have declined by $50 million, while SDRs have increased by $8 million. The decline in total reserves was thus $2.36 billion. On a year-to-year basis, growth in FCAs was 2.29 billion, in gold holdings $270 million and SDRs one million. The rise in total reserves on a yearly basis was $2.56 billion.

Forex reserves were lower by $198 million in the week ended August 11 with a decline in FCAs by $202 million and marginal increase of $4 million under special drawing rights (SDRs) to $12 million. Gold holdings were unchanged at $2.92 billion.

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