Prior to the 1991 reforms, India's economy was characterized by significant state control, including financial repression and directed credit. The RBI operated within this framework, prioritizing control over monetary aggregates and credit allocation over market-based mechanisms. Reserve money formed the basis of the money supply multiplier and was directly manipulated by the central bank.
Prior to 1991, the RBI regulated
Asked in WBCS Main Paper 5 2022 · Topic: Money & Banking (Money: Functions, Forms, and Measures of Money Supply)
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