PART ONE : THE ECONOMY: REVIEW AND PROSPECTS

I.

ASSESSMENT AND PROSPECTS

Assessment of 2009-10

Prospects for 2010-11

Near to Medium-term Challenges for the Reserve Bank

II. ECONOMIC REVIEW

The Real Economy

Aggregate Supply

Aggregate Demand

Price Situation

Money and Credit

Reserve Money

Money Supply

Financial Markets

International Financial Markets

Domestic Financial Markets

Market Activities

Financial Derivatives

Monetary Policy Transmission through Financial Markets

Equity and Housing Prices

Exchange Rate

Government Finances

Fiscal Stance During 2009-10

Fiscal Correction and Consolidation

State Finances

Combined Finances

Fiscal Dominance and Macroeconomic Conditions

External Sector

Balance of Payments

Current Account Balance

Capital Account

Foreign Exchange Reserves

External Debt

Overall Assessment

PART TWO: THE WORKING AND OPERATIONS OF THE RESERVE BANK OF INDIA

III.

MONETARY POLICY OPERATIONS

The Monetary Policy Process

Monetary Policy Operations: Context and Rationale

Liquidity Management

IV.

CREDIT DELIVERY AND FINANCIAL INCLUSION

Priority Sector Lending

Financial Inclusion

Export Credit

V.

DEVELOPMENT AND REGULATION OF FINANCIAL MARKETS

Money Market

Government Securities Market

Foreign Exchange Market

Corporate Bond Market

Derivatives market

VI.

REGULATION AND SUPERVISION OF FINANCIAL INSTITUTIONS

Systemic Stability Assessment

Major Decisions Taken by Board for Financial Supervision

Commercial Banks

Urban Co-operative Banks

Rural Co-operatives

Deposit Insurance and Credit Guarantee Corporation of India

Non-Banking Financial Companies

VII. PUBLIC DEBT MANAGEMENT

Debt Management of Central Government

Debt Management of State Governments

VIII.

CURRENCY MANAGEMENT

Currency Operations

Notes and Coins in Circulation

Clean Note Policy

Counterfeit Banknotes

Customer Service

Indigenisation of Paper, Ink and other Raw Materials for Production of Banknotes

Expenditure on Currency Printing and Distribution

IX.

PAYMENT AND SETTLEMENT SYSTEMS AND INFORMATION TECHNOLOGY

Payment and Settlement Systems

Information Technology

X.

HUMAN RESOURCES DEVELOPMENT AND ORGANISATIONAL MATTERS

Platinum Jubilee Celebrations

Human Resource Development Initiatives

Other Initiatives

The Central Board and its Committees

Foreign Dignitaries  

XI.

THE RESERVE BANK’S ACCOUNTS FOR 2009-10

Income

Expenditure

Balance Sheet

Significant Accounting Policies and notes to the Accounts for the year 2009-10  

Annex I : List of Speeches by the Governor and Deputy Governors: April 2009 to August 2010

Annex II : RBI Platinum Jubilee: Major Events and Activities

Annex III : Visits of Foreign Delegations to the Reserve Bank during July 1, 2009 to June 30, 2010  

Annex IV : Macroeconomic and Financial Indicators

BOXES

II.1

Potential Output Path for India, after the Global Crisis

II.2

Economic Growth and Inter-Sectoral Linkages

II.3

India KLEMS: An RBI Initiative to Measure Industrial Productivity in India

II.4

Impact of Trading in the Commodity Futures Market on Inflation

II.5

Supply Shocks, Relative Price Changes and the Role of Monetary Policy

II.6

Inflation Persistence in India

II.7

The Credit Channel of Monetary Policy during the Recovery

II.8

Financial Innovations in India: Balancing the Goals of Growth and Stability

II.9

Recommendations of the Thirteenth Finance Commission  

II.10

Fiscal Dominance and Risks to Inflation in India

II.11

Crowding-Out Concerns: What the Empirical Evidence Suggests?

II.12

India’s Export Basket: An Assessment of Comparative Advantage

II.13

Impact of Exchange Rate Movement on the Economy  

II.14

Global Initiatives to Supplement National Policies in Dealing with External Shocks

III.1

Challenges to Central Banking in the Context of Financial Crisis:

Major Findings of the First International Research Conference

III.2

Neutral Policy Rate

VI.1

Global Crisis and Regulatory Lessons: India’s Response so far

VIII.1

Procedure for Dealing With Counterfeit Currency  

IX.1

New Cheque Standard “CTS 2010”

IX.2

IT Governance

X.1

Reserve Bank’s Platinum Jubilee Year - Outreach Programme

CHARTS

II.1

Real GDP Growth

II.2

Performance of Agriculture during Drought Years

II.3

Comparative Yield Levels

II.4

Total Procurement, Offtake and Food Stocks

II.5

Growth in IIP (y-o-y)

II.6

IIP – Sectoral Growth  

II.7

Current IIP Level as Compared to the Extrapolated 2005-07 Trend  

II.8

Trends in Consumer Goods Production and Private Final Consumption Expenditure

II.9

Growth Trends in Industries Supporting Capital Formation

II.10

Growth in Infrastructure Industries

II.11

Growth in Services Sector GDP

II.12

Growth Trend in Cargo Movements

II.13

Weighted Contribution to GDP Growth from Demand Side

II.14

Growth in Consumption and Investment Demand

II.15

Rate of Saving and Investment

II.16

Household Financial Saving

II.17

Trends in Wholesale Price Inflation

II.18

Sources of WPI Inflation

II.19

Inflation in Major Sub-groups (WPI, y-o-y) March 2010

II.20

Weighted Contribution (WC) of Food and Fuel to WPI Inflation (y-o-y) in Relation to Their Combined Weight in WPI

II.21

Global and Domestic Inflation

II.22

Expectations for Cost of Raw Material and Selling Price: Reserve Bank’s Industrial Outlook Survey

II.23

CPI and WPI Inflation

II.24

State-wise CPI-Agricultural Labourers Inflation

II.25

Growth in Reserve Money (per cent)

II.26

Important Sources of Variation in Reserve Money

II.27

Sources of Variation in Net Reserve Bank Credit to the Centre

II.28

Liquidity Management Operations

II.29

Money (M3), Time Deposits and Interest Rate

II.30

Variations in M₃ in ` crore and per cent share of Major Components of M₃ in the Variation

II.31

Share of Credit to the Government from the Banking System in the Variation in M₃ (per cent)

II.32

Variations in M₃ in ` crore and per cent share of the Sources of M₃ in the Variation

II.33

Non-food Credit Growth (y-o-y, per cent)

II.34

Scheduled Commercial Bank’s Credit (Quarterly Variation)

II.35

Total Flow of Financial Resources to the Commercial Sector (` crore)

II.36

Sectoral Deployment of Bank Credit (y-o-y growth in per cent)

II.37

Indicators of Global Financial Market Developments

II.38

Indicators of Risk in Domestic Financial Markets

II.39

Activities in Domestic Financial Markets

II.40

Activity in Financial Derivative Markets

II.41

Movement in the Government Securities Yield Curve

II.42

Transmission of Policy Rates to Financial Markets

II.43

Movement in Equity and Housing Prices

II.44

Exchange Rates and Forward Premia

II.45

Key Deficit Indicators of the Central Government

II.46

Ratio of Revenue Receipts and Expenditure to GDP  

II.47

Budgeted and Revised Expenditure of the Central Government in 2009-10

II.48

Rolling Targets under the Medium Term Fiscal Policy Statement

II.49

Extent of Moderation in Deficit Parameters Adjusting for One-off Items During 2010-11

II.50

Major Deficit Indicators of State Governments

II.51

Combined Deficit Indicators as Ratio of GDP

II.52

Growth in Combined Expenditure and Revenue Receipts

II.53

Combined Revenue Deficit, Savings and Investment Rate

II.54

Trade Deficit and Combined Fiscal Deficit

II.55

Key Global Indicators

II.56

India’s Merchandise Trade

II.57

Export Growth of India vis-a-vis Advanced Economies and EMEs in 2009

II.58

Country-wise and Commodity-wise India’s Trade Performance

II.59

Performance of India’s Invisibles

II.60

Trends in the Major Components of Balance of Payments

II.61

Trends in Major Components of Capital Flows (Net)

II.62

Country-wise FDI Flows

II.63

Industry-wise FDI Flows

II.64

Exchange Rate Flexibility in India

II.65

External Debt Indicators

III.1

Outstandings under LAF, MSS and GOI Balance

III.2

Repo (+)/Reverse Repo(-) under LAF  

VI.1

Soundness Indicators of SCBs

VII.1

Cash Balances of the Central Government

VIII.1

Cost of Security Printing

IX.1

Share of Paper Based versus Electronic Transactions

IX.2

Real Time Gross Settlement System (RTGS)

X.1

Total Staff Strength of the Reserve Bank

XI.1

Assets and Income

XI.2

Major Items of Expenditure

TEXT TABLES

III.1

Movements in Key Policy Rates in India

IV.1

Priority Sector Advances

IV.2

Recovery of Direct Agriculture Advances

IV.3

Credit to MSE Sector by SCBs

VI.1

Select Financial Indicators

VI.2

Timeframe for Implementation of Advanced Approaches in India

VI.3

Frauds in Banking Sector

VII.1

Gross and Net Market Borrowings of the Central Government

VII.2

Central Government’s Market Loans - A Profile

VII.3

Maturity Profile of Central Government Dated Securities

VII.4

Treasury Bills in the Primary Market

VII.5

Market Borrowings of State Governments

VII.6

Yield on State Government Securities

VII.7

Residual Maturity Profile of Outstanding State Development Loans and Power Bonds

VII.8

WMA/Overdrafts of State Governments

VII.9

Number of days States availed of Special & Normal WMA and Overdraft

VII.10

Investments of the State Governments / UT

VIII.1

Banknotes in Circulation

VIII.2

Coins in Circulation

VIII.3

Banknotes Indented and Supplied

VIII.4

Indent and Supply of Coins

VIII.5

Disposal of Soiled Notes and Supply of Fresh Banknotes

VIII.6

Counterfeit Notes Detected

IX.1

Payment System Indicators - Annual Turnover

X.1

Reserve Bank Training Establishments - Programmes Conducted

X.2

Number of Officers Trained in External Training Institutions in India and Abroad

X.3

Recruitment by the Reserve Bank – 2009

X.4

Staff Strength of the Reserve Bank

X.5

Category-wise Actual Staff Strength

X.6

Reserve Bank’s Office-wise Staff Strength

XI.1

Gross Income

XI.2

Earnings from Foreign Sources

XI.3

Earnings from Domestic Sources

XI.4

Expenditure

XI.5

Trends in Gross Income, Expenditure and Net Disposable Income

XI.6

Contingency and Asset Development Reserves and Surplus Transfer to the Government

XI.7

Balances in CGRA, EEA and IRA

XI.8

Balances in Contingency Reserve and Asset Development Reserve

XI.9

Outstanding Foreign Currency and Domestic Assets

XI.10

Foreign Exchange Reserves

XI.11

Investments in Shares of Subsidiaries/Associate Institutions