L------.-- I · 2016. 7. 16. · by the American Cyanamide Company. The Sindri Fertilizer Factory began opera tions in November 1951; it has reached 50% of its capacity (~OO . tons

~') '-.• -. -, '" <' .. l <-,' ,_., , J'I

ON I

ZE

No. E-230

CONFIDENTIAL

L------.--~----------------------~ This report is limited to those members of

the staff to . whose work it directly relates.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

RECENT ECONOMIC AND FINANCIAL DEVELOPMENTS IN INDIA

July 25, 1952

Prepared by: A. Basch Economic Department

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Table of Contents

Page No.

I. Disinflation . • . . · · 1

II. Industrial Production · · · · · · • 3

III. Budget . . . . . . . • · · · · · · . 4

IV. Balance of Payments • · · • • · • .. 6

V. Development Program · . . . . 9

APpendices

I. Balance of Payments (including Pakistan)

II. 1952-53 Budget of the Central Government of India

III. Scheduled Banks

IV. Trends in the Prices of Selected Commodities

RECENT ECONOMIC AND FINANCIAL mVELOPI;lETJTS IN INDIA

I. DISINFlATION

The recent financial and economic situation in India can be charac­terized as a period of disinflation which started in the late Autumn of 1951.

Inflationary pressure has persisted in India ever s:ince the war, and it was increased as a result of the post-Korean boom. In spite of serious attempts by the Govermnent of India to insulate the domestic !)rice level from the effects of developments abroad through increased export duties, export embargoes, and other measures, the wholesale price index increased from 397.1 on June 24, 1950, to 462 in mid-April 1951--which ,'{as the highest point; the index of food articles rose during this period from 392.6 to 414.3.

India followed a cheap money policy in the post1Jar period ,,(hich inclu­ded support of the government bond market by the Reserve Bank. Since 1950, however, the Reserve Bank has altered its policy, first, by allowing a gradual fall in government bond prices. After the official bank rate was increased from 3% to 3i% in November 1951, the first movement in 16 years, the Reserve Bank stopped purchasing government bonds in the market, leaving them to find a new price level, and limited its intervention to the 3% 1986 government bonds, the price of 'J'lhich was stabilized at around 82. In the period July 1951-June 1952 the Reserve Bank holdings of Government of India securities were reduced by Rs. 520 million. Changes in government security~~a-tions in this period were as foll~lS;

Government of India Securities •

July 6, 1951 July 6, 1952

Price in Rs. (Yields) Prices in Rs. (Yields) -3% 1963-66 94/1h/O 0.81%) 92/9/0 0.85%)

301 /0 1966-68 94/5/0 (3.49%) 90/5/0 0.89%)

3% 1986 or later 92/14,10 0.23%) 81/5/0 (3.69%)

This policy curtailed the availability of commercial bank funds, which usually had been increased during the busy season through sales by the banks

- 2 -

of government bonds to the Reserve Bank. The result was a credit stringency which was relieved only to a small extent by the establishment of re-dis­counting facilities for internal bills and by increased borrowing by commer­cial banks from the Reserve Bank. Such borrowing by the scheduled banks rose by Rs. 211 million in one year.

The effects of disinflation can be demonstrated in the main items of the balance sheet of the Reserve Bank of India. The following table shorTS the decline in nearly all items, the greatest being the reduction in foreign assets as a result of a balance of payments deficit; the notes in circulation declined by more than 10%, and so did the holdinrs of the Government of India securities.

Notes in circulation Foreign assets Government of India

securities Investments Loans and advances Central Gov. deposits Bank deposits

Total denosits Liabilities or Assets

Reserve Bank of India • (Rs. Million)

December 1951 (a.verage of

June 29, 1951 Fridays)

12,574.7 11,412.5 8,.574.1 7,785.9

5,166.2 h,681.3 735.8 999.9 187.0 116.4

1,628.3 2,053.8 587.3 498.2

3,098.4 3,288.5 3,Li16.4 3,588.8

June 1952 compared to

June 27, 1952 .lune 1951

11,287.5 -1,287.2 6,833.1 -1,741

4,646.3 - 519.9 874.5 ~ 138.7 234.6 47.6

1,179.0 - 449.3 532.9 54.4

2,351.5 ,

2,810.6 - 615.8

The statement of the scheduled banks on May 18, 1951, and Hay l6~ 1952, also sh~vs a decline in advances and investments by more than 11%. There was also a marked decline in deposits.(See Ap~endix III).

The credit stringency could not remain without results on the economic life of India. Holders of stocl\:s of commodities and even of gold were faced vnth the necessity of liquidating them in order to be able to pay their obli­gations. Thus, in the first months of 1952, a break in the price structure took place which was reflected in the movement of the price indices.

The wholesale price index which reached a high of 462 in the middle of April 1951 began to decline moderately in the second half of 1951 and reached 433.1 on the December average. A steeper decline started in February and the lowest point was reached at 365 on May 31, 1952 •. (See A?pendix IV) The index rose to 378.4 on June 21, 1952. The wholesale index for food

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dropped from its hi:::h of 414.3 in April 1951 to 336.4 on May 31, 1952, and went up to 356.2 on June 21. At the end of June 1952 the wholesale price index was nearly 5% below pre-Korean level, and the food index was nearly 8% below the pre-Korean level.

The substantial price decline in the first months of 1952 was accom­panied by an increased su.?ply of commodities. Goods which were considered scarce appeared on the markets, and it was a~parent that dishoarding took place on a large scale, including sales of grain hitherto hidden. To alle­viate the situation, the Government of India took various measures by which it attempted to encourage exports and also to expand markets at heme.

Export duties and quantitative export restrictions have been sharply reduced or, in the case of some commodities, entirely eliminated. Internal distribution controls have, for all practical purposes, been suspended in the case of cotton textiles and sugar and have been relaxed for raw cotton. Because of the great improvement in the foodgrain supply, controls on grain distribution have been largely abolished in Hadras and the United Provinces and have been relaxed in several other States. Government subsidies on im­ported foodgrains have been abolished except for milo.

Thus1 the market situation has changed allover India. The most sur­prising change took place in the food !,osition. The government-held stocks of foodgrain reached 3.72 million tons on June 15, 1952, compared to 1.34 mil­lion tons at the beginning of the year. Practically all 1952 imports of fooderain went into government stocks. Hith wheat harvest reported to be good, it is expected that the foodgrain position will remain favorable throughout the whole year. The substantial price decline in sugar, oilseeds, and also jute will remedy the price relations between foodgrains and cash crops which in the past two years proved to b e a handicap to the ]roduction of grain and an encouragement to the yroduction of cash crops.

II. nmUSTEIAL PRODUCTION -

The upward trend in the industrial production continued in the first four months of 1952 despite declining prices. The index of industrial pro­duction which reached 111.4 in 1951 (1946 = 100) as compared with 105.2 in 1950 marked further increases in Janua~J and February 1952. It was 123.3 and 130.7 as compared with 111.4 and 117.7, respectively, in the same months of 1951. In the first two months of 1952 the generation of electric energy reached 981.5 million kw compared with 910.8 million kw in January-February 1951. Foll~wing are the production data for the first quarters of 1951 and 1952 for several important industries:

Steel (tons) Cloth (Yards) Yarn elbs.) Jute goods (tons) Cement (tons) Paper (tons) Coal (tons)

-4-Production ..

First Quarter 1951 First Quarter 1952

267,000 973 million 301 million 201,800 730,000

30,992 8.57 million

215,750 1,030 million 338 million 258,)00 822,000

34,527 9.41 !:lillion

Cotton textile production increased further in April and so did the production of coal, steel~ cement, and fertilizers. Production of jute manufactures is higher than in 1951 when it was limited by the lack of raw jute, the supply of which is now ample. New factories have been put into operation, among them the important dyestuffs and Dharmaceuttcal plant built by the American Cyanamide Company. The Sindri Fertilizer Factory began opera­tions in November 1951; it has reached 50% of its capacity (~OO tons of fertilizers daily).

It appears that at lower prices the domestic market is expandinc and furthermore the price adjustment and the reduction or removal of export duties has not failed to encourage Indian exports.

III. BUDGET

The 1952-53 budget submitted to the Parliament at the end of Ma:r took into account the effect of the reduced exnort duties. The revenue fron cus­toms duties is estimated at Ra. 1,650 miliion as compared with Rs. 2,)20 million in the revised estimate for 195+-52 and Rs. 1,571 million actual receipts in 1950-51. (Revenue from export duties reached Rs. 819 million in 1951-52 or about double the amount of Rs. h08 million in 1950-51.) !iainly as the result of the reduced estimate of customs receipts, the new revenue budget assumes a Burnlus of only RSe 37 million as compared to an estinated surplus of Rae 187 million in the preliminary budget which was presented in February. The fol10iving table gives the overall figures for the budget for the three years 1950-51 to 1952-53.

-g-

(In Rs. tJIil1ion)

1950-51 1951-52 1952-53 Account Rev. Estimate Budget

Total Exoenditure 4,818416 6,444.3 5,938.7 .. Of which:

Capital accounts 1,364.2 2,393.7 1,926.2

Total Receipt::; 4,495 5,391.8 4,341.7

(Revenue Budget Surplus) ( 592) (926) (7)

Total Deficit 363.6 1,052.5 1,597

Borrovfing (net) 507.8 1,015.5 841

Movement of Government Cash Balances .j. 124.3 - 37 - 756

Government Cash Balances at beginning of fiscal year 1,495 1,619.3 1,582.3

In 1950-51, the Government was able to increase its cash balances; and in 1951-52 in spite of substantially increased total expenditure, especially expenditure on capital accounts, the government cash balances were reduced by only Rs. 37 million. During that year, net borrm'Ting provided Rs. 1,015.5 million, of y[hich Rs. 900 million were the rupee proceeds of the American YTheat Loan.. HOW'ever, the total domestic permanent debt was reduced by Rs. 379 million. Thus, substantial development expenditures were financed in a non-inflationary way.

The 1952-53 budget expects an overall deficit of Rs. 756 million, after net borrowing of Rs. 841 million. This would reduce the government cash b alanees to about Rs .. 830 million. Of this amount about half is ear­marked for projects to be financed from the rupee proceeds of the wheat loan and Rs. 400 million is considered as a minimum for governraent administration belo"'i which the cash balances are not to be reduced. Of the estimated net borrOW'ing, Rs. 100 million represents transfer of proceeds of t he American vVheat Loan, Rs. 513 million is expected from small savings, and the remainder

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from other borrowing. No i.ndication was given as to whether the Government intends to issue a new loan during the present fiscal year. The market con­di tions for neVI loans have ir!lproved but a hieher rate of interest than the rate on the existing loans is expected.

Assuming that there 'viII be no major changes in the estimated bUdeet-­in the past the Indian budget estimates were rather conservative and sho\.'red eVery year results better than expected--it is likely that government balances will be reduced less than is estimated at present. For instance, the United States 1951-52 grant which will be disbursed mostly in the coming year, the new grant for 1952-53, and the Canadian, Australian, and New Zealand grants on the Colombo Plan might together amount to at least Rs. 500 million. This would make it possible to maintain a hiGher level of government cash balances, which by July 11, 1952, had declined to Rs. 1,022 million. Thus, the Govern­ment should be able to provide the funds needed for the increased development ,rogram in 1952-53.

rv. BALANCE OF PAX:lEHTS

The balance of trade and consequently the balance of paJrments has shown deficits ever since June 1951. The trade deficit was due to sub­stantially increased imports of grain and raY[ cotton, im~orts related to the development program, and finally to a liberal import policy aiming at an ample supply of consumer goods. The total trade deficit for 19511'ras Rs. 1,397 million as against atrade surplus of Re. 281 million in 1950. Both imports and exports increased greatly. Total imports rose from Rs. 5,590 million to Ra. 8,702 million and exports from Rs. 5,871 million to Rs. 7,305 million. Imports of foodgrains amounted to about Rs. 2,200 million. Total deficit on current account reached Rs. 935 million as compared to a surplus of Rs. 574 million in the preceding year. (See table belO¥T) The deficit was met mainly by the U. S. Grain Loan to the extent of Rs. 585 million and by a reduction of India1s foreign exchange assets. The sterling balances of the Reserve Bank of India declined from Rs. 8,347 million at the end of December 1950 to Rs. 7,813 million at the end of December 1951. The sterling balances vrere also used for capital transactions, particularly for the re)atriation of the U.K. capital fror" India.

1/ See -

Balance of Payments on Current Account !I (In Rs. Hillion)

Imports, c.i.f. 1950 1951 - -a. private 4,107 6,018 b. government 1,483 2,684

Total imports 5,590 8,102

Exports, f.o.b. 5,871 7,305

Trade Balance

~ 281 ... 1,397

Invisibles (net) 294 .;. 462 Current Account (net) 575 935

also Apper~ix II.

- 7 -

In the period July-June 1950-51 net terms of trade were 122 compared to 107 in the previous year. In the last quarter of 1951 the ter~s of trade deteriorated to 116 and to 108 in February 1952, thus reaching the pre-Korean level.

On dollar trade,!! India increased its exports to the United States and Canada in 1951 to :$330 million compared with $295 million in 1950. Dollar imports increased by a much greater amount from (';241 million to :;:;498 million" however, resulting in a large deficit of about ,,~170 million 'vith the United States and Canada. Increased imports of U. S. grain and cotton alone accounted for )232 million of the larger dollar purchases in 1951. The major portion of the dollar denci t was financed by drawings on the U.S. Food Loan and the lERD loans plus Canada1 s assistance under the Colombo Plan.

The trade deficit has continued in 1952. In the Deriod January-April 1952, the deficit "las Rs. 1,388 million, exports being Rs" 2,133 million and imports Rs. 3,521 as compared to a surplus of Es" 311 million for the same period in 1951 ~dth exports at Rs. 2,581 million and im?orts at Rs. 2,270 million.

The trade deficit a2ain was due to continuing large imports of grain and raw cotton in addition to increased imports of machinery. United States exports to India in the period January-April 1952 amounted to ;r243 million cOI:l}?ared to ,:il13 million in the first four months of 1951"1 Of the $243 mil­lion, $111.7 million Was for grain and~82.4 million for cotton compared to ~38.5 million and ~36.9 million respectively in 1951. In the first six months of 1952, the sterling balances were reduced trJ Rs. 960 million. Huch of the high level of imports in early 1952 was the result of prior commit­ments, especially for grain and cotton. The import rate will undoubtedly be much smaller during the remainder of the year, and by May the qecline of sterling balances ,,'laS slowed down and amounted to only Re. 13 million C12. 7 million) in June 1952.

Months

December 1951 January 1952 February March April :May June

Sterling Balances (in Rs. million)

7,813 7,653 7,453 7,213 7J 013 6,866 6,853

- 160 - 200 - 240 - 200 - 147 - 13

11 Dollar trade figures from United States and Canadian statistics.

- 8 -

At the Karachi meeting of the Colombo Plan Committee, India estimated its balance of trade deficit for the period April 1952 - March 1953 at Rs. 2,000 million. To meet it, there- v{as available Rs. 750 million sterling balances plus Rs. 40 million equivalent of IBRD loans to be disbursed. This left uncovered an amount of Rs. 1,210 million. Since December 1951, when these figures were prepared, the situation has changed in various respects. Food imports in 1952 will be reduced by 1 million tons to about 4 million tons. There vall also be less imryort of raw cotton. These two items alone mi£ht reduce the deficit by Rs. 500 million or Rs. 600 million. Moreover, restrictions ('n dollar imports have been recently tightened in India. The changed situation on the Indian market will probably reduce automatically various imports and encourage exports. The general urice declines of early 1952 have tended to correct maladjustments between raw materials and manu­factured goods prices and should, therefore, strengthen Indiafs basic export position. It may be assumed that exports will on the whole reach the value estimated in the Karachi report. Although prices of various commodities have declined, for instance, of jute manufactures, it is very likely that the ex­port volume '.nll be much higher. To that, one has to add also eX?orts cf various corrrnodities Which until recently were subject to export restrict::'o::1s. If India's remaining balance of payments deficit is around Rs. 5-600 million, India will be in a position to meet it. The U. S. erant for 1951-52 and a substantial part of the 1952-53 grant 'ld.ll be disbursed in the '')resent. year, to which may be added the Canadian, Australian, and Nel."T Zealand grants under the Colombo Plan. Fron these sources India should be able to obtain the estimate0 Rs. 5-600 million needed to close the gap in the balance of paJ~ents.

In the year JUly-June 1952-53, India will have 1 35 million of newly released sterling bala..l1ces and 1. 25 million carried over from last year. If she uses up the total amount, then only l;, 35 l.lillion or Rs. 465 million will be available to meet the bW.ance of payments deficit in 1953-54 and the s~~e amount in the remaining years of the Colonbo Plan. The rylanned balance of payments deficit for theFive Year Plan assumed a large imports of consumer goods conSidered necessary to check the inflationary pressure resulting from the high rate of development. Although it was estiflated that these deficits would decline sharply, in 1953-S4;,they still will be higher than 1. 35 million yearly. To meet these deficits additional foreign assistance would be re­quired. However" the recent developments on the markets in India may reduce the need for :tmport of consumer goods.

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v. DEVELOPMENT PROGP.AM

The recent developments in India and the process of disinflation have brought the country nearer to more settled conditions, removing to a great extent the inflationary pressure and stoP?ing the speculation which was strong in nearly every field of the commodity market. The economy is re­adjusting rather quickly, and surprisingly so, to the new conditions and there is everJ expectation that the upward trend in production will continue.

The development activities in the public sector have been going fOTVlard at an accelerated rate. Public exoenditure on development in 1950-51 amounted to Rs. 2,600 million. They were increased from Rs. 3',414 million in 1951-52 and are estimated at Rs. 4,100 million for 1952-53. Around 70% of the 19.51-52 e:h."Penditure was oet from India's resources. The Central Goverrunent loans and advances to State Governments for develonment have been increased from Rs. 576 million in 1950-51 to Rs. 639 million in 1951-52 and to Rs. 778 mil­lion in 1952-53. The emphasis of the development program is on the increased production of food. This task is now being attacked on two fronts. Increased production is expected to be achieved not only by an increase of the cultivated and irrigated areas but also by intensive efforts in a:ricultural imnrovement in regions with an assured supply of water. The substantial Community Devel­opment Program which is a result of the U.S. program for India is expected to speed up the increased production of food so that the original targets of the Colombo Plan may be further revised u~vards.

rJajor increases in food production are expected after 1953-54 when some of the basic development works now in progress will be completed. The Five Year Plan assumed yearly imports of 3 million tons of foodgrains during the period 1951-52 to 1955-56. If the Five Year Plan targets of newly irrigated and reclaimed lands are reached to a substantial extent, taking into account the expected and promising results of the new Community Develop­ment Program, grain imports may decline yearly at the end of the Five Year Plan below the 3 million tons. This vdll have substantial foreign exchange savings effects on the Indian balance of payments and will reduce in parti­cular purchases from the dollar area because India should be able, as she did in the past ~~o years, to purchase at least 2 million tons of grain from sources other than the dollar area.

With regard to cotton, the expected increase in ~roduction of ray. cot­ton will enable the country to increase nroduction of cotton piecegoods and 'e~"Ports of raw cotton. Im~orts of about 800,000 bales of Arr.erican type cot­ton will, however, be needed. India has been purchasing cotton in Egypt, Uganda, Kenya, Peru, and u!' to 1950 in Pakistan. It is only realistic to assume that India will again be able and willing to purchase cotton from Pakistan. It should not be necessary to buy more than 200,000 bales of cotton from the United States. Thus, substantial dollar savinf,s can be expected from the increased production of grain and cotton. There will be dollar savinGS in the long run also in other items such as oil, iron and steel, and chemicals, while an increase in im:,orts might be ex.?ected in machinery.

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A dJ~~mic approach is indicated for a long-range balance of paJrments forecast of India in view of the large .. scale developments now being carried out in various sectors in the country:s economy_

This greatly increased rate of investment--one third higher than 1!'lras proposed in the Colombo Plan--was possible in the last two years because of Indiats favorable balance of payments and fiscal position in 1950-51 and the substantial external assistance in the last year. There is reason to believe that funds will be available also for the 1952-53 program. Additional ex­ternal assistance (grants and loans) will, hovvever, be needed for the remain­ing three years of the Five Year Plan. It can betaken for granted that the Government of India rTill do the utmost to carr;)' out the nost important projects of the program, particularly those from 'which increased agricultural production is expected.

Despite important changes which have taken Dlace in India in recent months, ou.r . of India t s creditworthiness' as >Jresented in the last paper on I~1~j_2.. (J:;o.. E-207a) does not need to be a1 ~ered. A nevr review of the whole si on is desirable to find out (a) how the Five Year ;::>lan is being imp1en:ented and what will be its effects on the balance of payments and (b) what will be the lasting effects on Indiats economy of the recent economic and financial development. Various signs indicate that the pro­found readjustment going on may prove to be favorable in the long run. This should be true especially of the food situation and the position of the ca:;::>i"l.Ial market.

APPENDIX I

Balance of Payments ~ including Pakistan)

(In Rs. Nillion)

A. Goods and Services 1950 1951

Trade Balance ;. 281 -1,397 Investment Income -236 - 236 other t 464 ;. 593

Total I- 458 -1,078

B. Private Donations and Capital Hovements I- 57 I- 119

(Donations) ;. 116 I- 143

c. Special Official Financing I- 165 I- 117

(IBRD Loans) I- 95 ;. 48

D. Errors and Omissions - 227 - 238

E. Total f 453 -1,080

F. Compensatory Official Financing

Of which:

Barter Deal f 20 U. '). Food Loan I- 585 Repatriation of Indian Currency -126 - 193 Foreign Exchange\ssets - 211 ,L 467 Other short-term liabilities -. 119 I- 237

Total - 453 ,'1,080

APpr:.:r-1DIX II

1952-53 Budget of the Central Government of India

I. Reven11e: Total Of which:

CUstoms Union excise duties Corporation Tax Tax on income other than Corporation Tax

II.. Expendi ture met from Revenue: Total Of which:

Defense services Civil 'lorks and mis­cellaneous public improvements

Revenue SUrplus

A. REVENUE BUDGET ( In Rs. riiillion)

Accounts 1950-51

4,106.6

1,571.4 675 .. 4 404.9

852.1

1,641.2

103.8

592.1

Rev. Estimate 1951-52

4,976.6

2,320.0 843.0 375.5

847.5

4,050.6

1,812.4

132.5

926.0

Budget Estimate 1952-53

4,049.8

1,650.0 860.0 305.3

736.3

4,012.5

1,979.4

149.5

37.3

B.. CAPITAL ACCOUNTS NOT NET FROM REVENUE

I. Total Disbursements I'f which:

Railway capital Posts and telegraphs Industrial development !fultipurpose river schemes Civil works

254.1 70.7 89.0 25.0 77.2

Transfer of the sale pro­ceeds of American-loan Wheat

Defense capital outlay 41.9 Loans and fI"dvances by the Central Government 576.3

II. Total Receipts Of which:

8ale proceeds of American and Lend-Lease ,SUrpluses

Permanent debt (net) Unfunded debt (net) Depreciation and other

Reserve funds

743.7

2.9

418.2

177.1 cont.

2,393.6

197.6 54.3 89.1 37.2

118.1

710.0 161.5

638.7

1,429.0

519.9 495.7

64.1

1,926.2

153.5 48.4

100.9 30.6

167.9

100.0 170.0

778.5

902.3

5.6 327.5 513.4

5.7

APPENDIX II - page 2

B. (cont.)

Accounts Rev. Estimate Budget Estimate 1950 ... 51 1951-5f 1952-S3

III. Deficit on Capital !\.Ccount 620.4 964.6 1,023.9 Covered:

Revenue ~rplus 592.1 926.0 ;37.3 iiisc. deposits, transfers,

remittances (net) 152.5 1.6 230 .. 6

Total 744.6 927.6 267 .. 9

IV. Movement of Government Cash Balances t 124.4 -37.0 - 156.Q

Balances beginning of fiscal year 1,495 1,619.3 1,582.3

End of 1952-53 830.1

C. TOTALS --BXPLNDITURE

Revenue Budget 3,514.4 4,050.6 4,012.5 CapitCl.l .Accounts 1,364.2 2,393.~ 12926.2

Total Expenditure 4,878.6 6,444.2 5,938.7

RECEIPTS

Revenue Budget 4,106.6 4,976.6 4,049.8 Capital receipts minus borrowing _388.4 415.1 391.9

Total Receipts 4,495.0 5,391.1 4,341.1

Deficit (-) or surplus(l) - 383.6 .. 1,052.5 - 1,597.0 Borrowing (net ) 507.8 1,015.5 841.0

f!1ovement of Cash Balances I 124.2 37 756.0

APPENDIX III

scheduled Banks

(in Rs. million)

Hay 18, 1951 Iviay 16, 1952

Deposits 8,986 8,473 ... 513

Advances 5,669 5,025 - 647

Investments 2,941 2,949 I- 8

Dorrowings from the Reserve Bank 141 352 I- 211 t

Balances with the Reserve Bank 478 485 I- 7

APPENDIX IV

Trends in the Prices of Qelected Commodities

(Base: Year ended August 1939 • 100)

Pre-devalua- Pre- Average Average tion Korean of of

Commodity (Sept. 17 (June I"1id .. weeks weeks Aarch April J\ay 1949) 24, April. July Jan. 29, 26, 31,

1950) 1951 1951 1952 1952 1952 1952 (1) (2) 0) (4) (5) (6) (7) (8 )

Food articles 392.6 407.1 414.3 408.3 393.0 339.3 351.4 336.4

Industrial raw materials 470.1 494.2 699.8 644.0 580.6 447.1 420.4 414.7

Semi-manufactures 334.4 335.5 390.1 379.6 369.3 340.6 339.8 321.4

Nanufactures 350.0 346.9 413.1 405.6 400.9 382.4 379.9 370.9

Miscellaneous 557.8 692.4 789.1 724.6 735.0 590.9 601.5 588.8

All commodities 386.7 397.1 462.0 447.0 430.3 378.2 377.4 365.0