The main reason for the high growth of money supply in india since 1990.Is
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After resorting to monetary jamming by inflating benchmark interest rates the money supply growth continues unabated and is moving towards 20% mark.
This highest growth seen from 1990.
Such high money supply can cause inflationary pressures in economy.
As per latest figures the year-on-year (y-o-y) growth is a wide indicator of money in system was 20% as of August 18.
3 components i.e. currency with the public and time deposits has recorded a rigid inflation.
Money supply has been growing above 14.5% in FY 2016 and is expected to increase by 15% in FY 2017.
Much of the growth in the recent past is due to pick up in government expenditure in first quarter of fiscal according to Shubhada Rao an economist,
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