The overall resource gap of the domestic economy widened
further in 2012-13 as compared to the previous year
reflecting the spill-over of the public sector deficit and the
downward rigidity of investment in valuables, even as the
financial surplus of the household sector remained more
or less unchanged at a relatively low level and the financial
deficit of the private corporate sector declined. The
stagnant and relatively low financial saving rate of the
households reflected, inter-alia, persistently high inflation
and slackening income growth. Aggregate funds raised
by all sectors declined for the second consecutive year to
around 57 per cent of NNP in 2012-13 reflecting
deceleration in economic activity. The ‘financial
development’ ratios viz., the finance ratio, the financial
interrelations ratio and the new issue ratio dipped in
2012-13 that largely reflected the slackening of real GDP
growth.
I. Introduction
This article analyses the Flow of Funds (FOF)
accounts for the fiscal year 2012-13 along with revised/
updated data for 2011-121.
Macroeconomic challenges facing the domestic
economy accentuated during 2012-13. Real GDP
growth slackened for the second consecutive year
largely on account of structural impediments and
enervated external demand. At the same time,
average retail inflation increased once again to double
digits. Moreover, the current account deficit (CAD)
distended on the back of elevated international oil
prices, higher gold imports and slower export growth.
Furthermore, while the central government fiscal
deficit increased during the earlier part of the year,
only to retract substantially in the latter part, state
government accounts deteriorated somewhat during
the year as a whole.
A number of policy initiatives were taken in
response to the emerging macroeconomic scenario
such as liberalisation of FDI norms, increase in the FII
limits in respect of domestic debt securities, gradual
deregulation of diesel prices and formulation of a
roadmap for fiscal consolidation. These measures
helped, inter alia, to reinforce investor sentiments and,
on the back of abundant global liquidity, the consequent
surge in FII inflows facilitated the financing of the
higher CAD.
Monetary policy was gradually eased during
2012-13 in response to the growth-inflation dynamics
and changes in banking system liquidity conditions
(largely shaped by variations in government cash
balances with the RBI, currency demand and the
differential between the growth rates of bank deposits
and bank credit); such measures took the form of
reductions in policy interest rates by an aggregate of
100 basis points, enhancement of export credit
refinance limit for banks, three rounds of CRR cuts of
25 basis points each and open market purchases that
injected primary liquidity amounting to `1.5 trillion.
Despite such order of monetary easing, reserve money
growth was relatively muted during the year mainly
because of the offsetting effects of the build-up of government cash balances, slackening of currency
demand and reduction in banks’ deposits with the RBI
following the CRR reduction.
The growth rate of commercial bank credit
declined during 2012-13 due to sluggish demand
conditions and deterioration in the asset quality of
banks; the deceleration was fairly broad-based with
the notable exception of retail loans (mainly housing).
Even so, the growth rate of bank credit remained higher
than that of bank deposits during the major part of the
year.
After two consecutive years, mutual funds
recorded positive resource mobilization in 2012-13,
reflecting the impact of various developmental,
regulatory and investor protection measures initiated
by the Securities and Exchange Board of India (SEBI).
Since 2009-10, mutual funds have been net sellers in
the equity market and net buyers in the domestic debt
segment. In contrast, FII investment has been skewed
in favour of the equity market. The premium income
of the life insurance industry remained near-static in
2012-13 after declining in the previous year; the
negligible growth in life insurance premium during
2012-13 was mainly on account of low growth in the
renewal premium (that contributes about 62 per cent
of the total premium) and decline in the first year
premium. Insurance companies remained important
investors in the long-term government debt segment.
The variegated non-bank financial institutions
(NBFIs) sector - comprising four financial institutions
(EXIM Bank, NABARD, NHB and SIDBI) and non-bank
financial companies [deposit-taking (NBFC-D), non-deposit
taking systemically important (NBFC-ND-SI)
and residual non-bank financial companies (RNBFCs)]
– showed differential movements in their balance
sheets during 2012-13. Resources raised by the four
financial institutions from domestic sources declined
while those raised via foreign currency increased
during 2012-13. The consolidated balance sheet of NBFC-D increased marginally during the year partly
because the reduction in their borrowings from banks
and governments more than offset the increase in
borrowings from financial institutions; on the asset
side, their investments in equity shares declined while
loans and advances moved up. On the other hand, the
borrowings and loans and advances disbursed by NBFCND-
SI increased substantially during 2012-13.
All these developments impacted the flow of
funds across different institutions and sectors.
Accordingly, this article is organised as follows. A
synoptic presentation of the (resource) gaps between
saving and physical (or real) investment of different
sectors is given in Section II2. The financing pattern of
the resource gaps of the different sectors is discussed
in Section III. An analysis of the instrument-wise
financial flows is presented in Section IV. The emerging
trends in select indicators of financial development
are set out in Section V. Section VI sums up the
discussion. Detailed Statements relating to FOF have
been released separately on the RBI website (www.rbi.org.in). The data on instrument-wise FOF accounts for
each of the sectors are presented in Statements 1 to 6.
The annual inter-sectoral flows are summarised in
Statement 7. Instrument-wise financial flows are
summarised for each year separately in Statement 8.
The details of the resource gap/ financial surplus of
the PCB Sector, Government Sector and the Household
Sector are given in Statement 9.
II. Evolution of Sectoral Saving-Investment Gaps
The overall resource gap (i.e., the CAD) of the
domestic economy widened to 5.3 per cent of NNP
during 2012-13 (Table 1). This largely mirrored the spillover
of the public sector deficit and the downward
rigidity of investment in valuables, even as the financial
surplus of the household sector remained more or less unchanged at a relatively low level and the financial
deficit of the private corporate sector declined.
Table 1: Net Saving and Net Investment of Different Sectors
(As percentage of NNP at current market prices) |
|
2003-04 to 2007-08 (Average) |
2008-09 |
2009-10 |
2010-11 |
2011-12 |
2012-13 |
1. |
Private Corporate Sector |
|
|
|
|
|
|
|
(i) Net Savings |
4.4 |
4.2 |
5.3 |
4.9 |
4.2 |
3.8 |
|
(ii) Net Investment |
10.3 |
8.6 |
9.5 |
10.4 |
7.3 |
6.2 |
|
(iii) Resource Gap (i-ii) |
-5.9 |
-4.3 |
-4.2 |
-5.4 |
-3.2 |
-2.4 |
2. |
Public Sector |
|
|
|
|
|
|
|
(i) Net Savings |
-0.3 |
-2.2 |
-3.1 |
-0.1 |
-1.5 |
-1.6 |
|
(ii) Net Investment |
5.2 |
7.3 |
7.0 |
6.5 |
5.7 |
6.2 |
|
(iii) Resource Gap (i-ii) |
-5.5 |
-9.5 |
-10.1 |
-6.6 |
-7.3 |
-7.8 |
3. |
Household Sector |
|
|
|
|
|
|
|
(i) Net Savings |
22.1 |
22.5 |
24.2 |
22.0 |
21.5 |
20.3 |
|
(ii) Net Investment |
9.6 |
11.2 |
10.8 |
10.8 |
13.6 |
12.4 |
|
(iii) Surplus (i-ii)# |
12.5 |
11.3 |
13.4 |
11.1 |
7.9 |
8.0 |
4. |
Total (1 to 3) |
|
|
|
|
|
|
|
(i) Net Savings |
26.2 |
24.6 |
26.3 |
26.8 |
24.1 |
22.6 |
|
(ii) Net Investment |
25.1 |
27.1 |
27.3 |
27.7 |
26.7 |
24.8 |
|
(iii) Resource Gap (i-ii) |
1.1 |
-2.5 |
-0.9 |
-0.8 |
-2.6 |
-2.2 |
5. |
Valuables |
1.2 |
1.4 |
2.0 |
2.3 |
3.1 |
3.0 |
6. |
Errors and Omissions |
0.3 |
-1.4 |
0.2 |
0.0 |
-1.0 |
0.1 |
7. |
Adjusted Resource Gap [4(iii)-5-6] |
-0.4 |
-2.6 |
-3.1 |
-3.2 |
-4.7 |
-5.3 |
# Household financial saving, as a ratio to GDP at current market prices, was placed at 7.1 per cent in 2012-13 as compared with 7.0 per cent in the previous year.
Note: (i) Saving and Investment are shown on net basis i.e. adjusting for consumption of capital (CFC). In respect of the household sector, this means
CFC is excluded from their gross investment in physical assets. The financial saving of the household sector are always reported after netting
out financial liabilities from their investment in financial assets.
(ii) The resource gaps may be adjusted for capital transfers (generally unrequited and non-recurrent transfers which are designed to finance the
gross capital formation of the recipient and made out of the wealth or saving of the donor) though these have been usually small.
Source: Central Statistics Office. |
The increase in the public sector deficit in 2012-13
was on account of a step-up in public sector investment
since the dis-saving rate of this sector remained nearly
unchanged over the year. Investment in valuables
(largely gold) remained downwardly inflexible in a
persistently high inflation environment, even as tax
and administrative curbs on the import of gold were
initiated towards the end of the fiscal year. Household
financial surplus hovered around 8 per cent of NNP
during 2011-12 and 2012-13, down from an average of
12.5 per cent during 2003-04 to 2007-08; this was
mainly a fall-out of sluggish income growth and high
inflation that reduced the real returns on financial
assets. On the other hand, the reduction in the
resource gap of the private corporate sector in the face of declining profitability and saving was entirely due
to the sharper cutbacks in the investment rate.
III. Sectoral Trends in Flow of Funds3
Aggregate funds raised by all sectors, as a ratio to
NNP, declined for the second consecutive year to around
57 per cent in 2012-13, in line with the deceleration in
economic activity (Table 2). The reduction in the financial claims relating to NNP was evident in the PCB,
banking and the (central) government sectors, in that
order. In contrast, financial claims issued by the OFI,
ROW and household sectors, relative to NNP, increased
during the year.
Table 2: Financial Claims by Sectors |
(` Billion) |
Sectors |
2003-04 to 2007-08 (Average)$ |
2008-09 |
2009-10 |
2010-11 |
2011-12 |
2012-13 |
1. Domestic Non-Financial Sector (1.1+1.2+1.3) |
9,656 |
13,522 |
17,421 |
22,493 |
24,564 |
25,129 |
|
(49.5) |
(54.1) |
(52.5) |
(54.7) |
(55.9) |
(53.6) |
1.1 Private Corporate Business |
4,646 |
4,996 |
7,276 |
13,861 |
12,834 |
11,605 |
|
(20.4) |
(20.0) |
(21.9) |
(33.7) |
(29.2) |
(24.8) |
1.2. Government |
3,320 |
6,889 |
8,109 |
5,852 |
8,874 |
10,311 |
Of which: |
(19.9) |
(27.6) |
(24.4) |
(14.2) |
(20.2) |
(22.0) |
1.2.1 Central Government |
2,600 |
3,241 |
3,940 |
3,983 |
5,690 |
5,390 |
|
(14.5) |
(13.0) |
(11.9) |
(9.7) |
(13.0) |
(11.5) |
1.2.2 State Governments |
411 |
1,344 |
1,708 |
1,624 |
1,471 |
1,673 |
|
(1.8) |
(5.4) |
(5.1) |
(3.9) |
(3.3) |
(3.6) |
1.3. Households |
1,690 |
1636 |
2,037 |
2,780 |
2,855 |
3,214 |
|
(9.2) |
(6.5) |
(6.1) |
(6.8) |
(6.5) |
(6.9) |
2. Domestic Financial Institutions (2.1 + 2.2) |
7,715 |
11,184 |
13,841 |
16,596 |
19,194 |
20,704 |
|
(40.3) |
(44.8) |
(41.7) |
(40.3) |
(43.7) |
(44.2) |
2.1. Banking |
5,311 |
8,550 |
6,989 |
11,560 |
14,756 |
13,960 |
|
(28.3) |
(34.2) |
(21.0) |
(28.1) |
(33.6) |
(29.8) |
2.2. Other Financial Institutions |
2,404 |
2,635 |
6,852 |
5,036 |
4,438 |
6,744 |
|
(12.1) |
(10.5) |
(20.6) |
(12.2) |
(10.1) |
(14.4) |
3. Rest of the World |
1,944 |
272 |
1,945 |
2,046 |
169 |
1,015 |
|
(10.1) |
(1.1) |
(5.9) |
(5.0) |
(0.4) |
(2.2) |
4. All Non-Financial Institutions (1+3) |
11,599 |
13,794 |
19,366 |
24,539 |
24,733 |
26,144 |
|
(59.7) |
(55.2) |
(58.3) |
(59.7) |
(56.3) |
(55.8) |
5. Total Claims Issued (1+2+3) |
19,314 |
24,978 |
33,207 |
41,135 |
43,926 |
46,848 |
|
(100.0) |
(100.0) |
(100.0) |
(100.0) |
(100.0) |
(100.0) |
Percent to NNP |
59.5 |
53.1 |
61.4 |
64.2 |
59.1 |
56.7 |
$ : The absolute numbers are averages of flows in current prices from 2003-04 to 2007-08.
Note: Figures in brackets are percentages to total claims issued. |
The composition of total claims issued in 2012-13
largely mirrored these changes over the previous year.
The share of claims issued by the PCB sector has
remained higher than the average position during 2003-
04 to 2007-08, notwithstanding a decline since 2011-12.
On the other hand, the share of claims issued by the
ROW sector has generally declined and remained lower
than the average during 2003-04 to 2007-08. The changes
in the shares of the other sectors in total claims issued
have generally been of a lower order over this period.
Private Corporate Business Sector
The PCB sector was adversely impacted by
slackening demand conditions in the economy, and as a consequence, profitability and other major parameters
generally moderated in 2012-13. During the year, the
PCB sector’s financial claims and financial investments
both declined - the former more sharply - which led to
a reduction in the financial deficit (Chart 1).
The pattern of financing the deficit showed a
substantial increase in the share of the ROW sector (via
FII, FDI and loans) during 2012-13. The share of the
banking sector in the total funding of PCB sector also
increased while that of the OFI sector declined.
Government Sector
Financial claims issued by the government sector
increased further in 2012-13 (Chart 2). The increase in
financial claims largely paralleled that of Non-
Departmental Commercial Undertakings (NDCUs)
including power companies and the state governments,
to some extent, even as financial claims issued by the central government declined, following cutbacks in
plan and capital expenditures and higher receipts from
social and economic services. The share of OFIs in
financing the resource gap of the government sector
increased sharply during 2012-13; this was almost
entirely reflected in terms of larger subscription to state
government securities and an increase in loans and
advances to NDCUs. With outflows under Small Savings significantly lower and accruals under government
provident and pension funds higher in 2012-13, the
share of households in funding the resource gap of the
government sector also increased. The share of the
banking sector in funding the government’s financial
deficit declined, partly reflecting the reduction in
Statutory Liquidity Ratio (SLR) by 100 basis points in
August 2012.
 Rest of the World Sector
Net financial claims (increase in liabilities minus
decrease in liabilities) issued by the ROW sector
which had dipped sharply in 2011-12, picked up in
2012-13 (Table 2). This increase was mainly on
account of the RBI’s purchases of foreign currency as
part of exchange rate management operations (as
against sales of foreign currency in the previous year)
in the context of the surge in capital (particularly FII)
inflows. Even so, net financial claims of the ROW
sector relative to NNP of the domestic economy in
2012-13 were placed at 1.2 per cent, much lower than
the average of around 6 per cent during 2003-04 to
2007-08.
Net financial assets (increase in assets minus
decrease in assets) of the ROW sector also increased
in 2012-13 after some slackening in the previous year;
this largely reflected (i) the substantial FII inflows, on
the back of abundant global liquidity and in response
to certain domestic reform measures as also the
increase in the FII limits in government securities and
corporate bonds and (ii) strong growth in short-term trade credits; both these flows were mostly directed
towards the private corporate business sector. In
contrast to the trend in net financial claims, net
financial assets of the ROW sector relative to NNP of
the domestic economy, hovered around 7 per cent in
2012-13 which was, in fact, slightly higher than the
average during 2003-04 to 2007-08, indicating the
general robustness of capital inflows into the domestic
economy over this period.
Household Sector
The financial surplus (i.e., financial investment
minus borrowings) of the households increased in
2012-13, albeit marginally relative to NNP. The
stagnant and relatively low financial saving rate of the
households reflected inter alia, persistently high
inflation and slackening income growth (Table 5).
The allocation of the financial surplus of the
households in 2012-13 showed that the banking
sector’s share declined – reflecting the deceleration
in currency in circulation and near-steady growth in
commercial bank deposits - but remained at over 50
per cent. On the other hand, the share of household financial investment in the OFI sector improved,
largely on account of mutual funds, even as life
insurance premium was somewhat sluggish. Similarly,
the share of the government sector in the total
financial surplus of the households increased
during 2012-13 reflecting improved collections
under Small Savings and government pension and
provident funds.
Banking Sector
Financial claims issued by the banking sector
declined during 2012-13. This was mainly due to
(i) lower accretion (vis-a-vis the previous year) to the
‘Currency and Gold Revaluation Account’ (CGRA)
(under ‘other liabilities’) of the RBI; (ii) decline in the
deposits of NDCUs with commercial banks; and
(iii) reduction in the overseas borrowings of commercial
banks. These, in the aggregate, offset the strong pickup
in the deposits of and borrowings from financial
corporations (under the OFI sector) and resulted in a
decline in total claims issued by the banking sector.
Reflecting these developments, the share of the OFI
sector in total claims issued by the banking sector
increased from an average of around 6 per cent during
2003-04 to 2007-08 to around 8 per cent in 2011-12
and further to over 17 per cent in 2012-13.
Financial uses of the banking sector also declined
during 2012-13. Within financial uses, commercial
bank investment in central government securities
declined substantially reflecting the impact of various
factors such as OMO purchases by the RBI and
reduction in SLR. The share of banking sector funds
directed towards the OFI sector via loans and advances
and investment in the shares and debentures
increased by around one percentage point to 8.1 per
cent in 2012-13; this share was negligible, on average,
during 2003-04 to 2007-08.
Other Financial Institutions (OFI) Sector
Financial claims issued by the OFI sector
increased during 2012-13 largely on account of higher
accretions to life fund4/ mutual funds and higher
borrowings by the sector. On the other hand, the
increase in the financial uses of the OFI sector during
2012-13 mainly reflected higher investment in
government securities and loans and advances to
commercial banks.
Reflecting these trends, the share of the banking
sector in total claims issued by the OFI sector declined
from around 24 per cent in 2011-12 to around 18 per
cent in 2012-13. On the other hand, the share of the
banking sector in financial uses of the OFI sector
increased from about 24 per cent to 40 per cent over
this period. The significance of the banking sector in
the sources and uses of funds of the OFI sector has
generally increased in recent years vis-a-vis the average
position during 2003-04 to 2007-08.
IV. Instrument-wise Financial Flows
During 2012-13, loans and advances remained
the most preferred instrument and their share in total
claims issued increased substantially over the previous
year as also the average during 2003-08, largely
reflecting the sharp increase in short-term credits from
the ROW to the PCB sector (Table 3). On the other
hand, the share of currency and deposits remained
more or less the same over the previous year. The
share of investments increased somewhat over the
previous year, with the reduction in the share of
government securities being offset by the increase in
the share of other securities including mutual funds.
The shares of life funds, provident funds and Small
Savings, which are important instruments of
household financial saving, improved in 2012-13,
reversing the trend observed over the past few years.
Table 3: Financial Flows by type of Instruments |
(` Billion) |
Instruments |
2003-04 to 2007-08 (Average)$ |
2008-09 |
2009-10 |
2010-11 |
2011-12 |
2012-13 |
1. Currency and Deposits |
4,759 |
7,222 |
7,650 |
10,661 |
11,518 |
12,208 |
|
(25.0) |
(28.9) |
(23.0) |
(25.9) |
(26.2) |
(26.1) |
2. Investments |
6,216 |
5,194 |
11,070 |
8,426 |
11,249 |
12,285 |
|
(31.2) |
(20.8) |
(33.3) |
(20.5) |
(25.6) |
(26.2) |
(a) Central and State Governments' Securities |
1,785 |
3,616 |
4,430 |
3,809 |
6,661 |
6,143 |
|
(10.5) |
(14.5) |
(13.3) |
(9.3) |
(15.2) |
(13.1) |
(b) Other Securities |
4,432 |
1,578 |
6,640 |
4,617 |
4,587 |
7,058 |
|
(20.7) |
(6.3) |
(20.0) |
(11.2) |
(10.4) |
(15.1) |
of which : (i) All Mutual Funds |
301 |
-704 |
318 |
-174 |
-49 |
571 |
|
(0.7) |
-(2.8) |
(1.0) |
-(0.4) |
-(0.1) |
(1.2) |
3. Loans and Advances |
5,053 |
6,052 |
8,610 |
12,474 |
11,154 |
14,213 |
|
(25.4) |
(24.2) |
(25.9) |
(30.3) |
(25.4) |
(30.3) |
4. Small Savings |
441 |
-144 |
395 |
361 |
-218 |
-73 |
|
(3.6) |
-(0.6) |
(1.2) |
(0.9) |
-(0.5) |
-(0.2) |
5. Life Fund |
964 |
1,713 |
3,842 |
2,226 |
1,256 |
1,684 |
|
(5.1) |
(6.9) |
(11.6) |
(5.4) |
(2.9) |
(3.6) |
6. Provident Fund |
617 |
713 |
1,289 |
1,375 |
891 |
1,097 |
|
(3.7) |
(2.9) |
(3.9) |
(3.3) |
(2.0) |
(2.3) |
7. Trade Debt |
164 |
280 |
-18 |
361 |
404 |
432 |
|
(0.9) |
(1.1) |
-(0.1) |
(0.9) |
(0.9) |
(0.9) |
8. Foreign claims not elsewhere classified |
-154 |
224 |
632 |
503 |
301 |
279 |
|
-(0.7) |
(0.9) |
(1.9) |
(1.2) |
(0.7) |
(0.6) |
9. Other claims not elsewhere classified |
1,253 |
3,724 |
-264 |
4,748 |
7,371 |
4,723 |
|
(5.9) |
(14.9) |
-(0.8) |
(11.5) |
(16.8) |
(10.1) |
10. Total Claims Issued |
19,314 |
24,978 |
33,207 |
41,135 |
43,926 |
46,848 |
|
(100.0) |
(100.0) |
(100.0) |
(100.0) |
(100.0) |
(100.0) |
$ : The absolute numbers are averages of flows in current prices from 2003-04 to 2007-08.
Note: Figures in brackets are percentages to Total Claims Issued. |
V. Select Indicators of Financial Development
The evolution of the various ‘financial development’
ratios derived from the FOF data viz., the finance ratio,
the financial interrelations ratio, the new issue ratio
and the intermediation ratio is depicted in Table 4 and
Chart 4.5 All the ratios, declined in 2012-13 in line with
the slackening of real GDP growth, except the
intermediation ratio, which increased slightly. The finance ratio, the financial inter-relations ratio and the
new issue ratio were lower in 2012-13 as compared to
their respective average positions of 2003-04 to 2007-08.
On the other hand, the intermediation ratio during
2008-09 to 2012-13 has generally remained higher than
its average during 2003-04 to 2007-08, indicating the
strengthening of the financial intermediation process.
VI. Summing Up
• Aggregate funds raised by all sectors, as a ratio to
NNP, declined for the second consecutive year to
around 57 per cent in 2012-13, reflecting
deceleration in economic activity. The reduction
in the financial claims was evident in the PCB,
banking, and the (central) government sectors, in
that order. In contrast, financial claims issued by
the ROW sector, relative to NNP, increased during
the year.
Table 4: Select Indicators of Financial Development |
(` Billion) |
|
2003-04 to 2007-08 (Average)$ |
2008-09 |
2009-10 |
2010-11 |
2011-12 |
2012-13 |
1. Secondary Issues# |
7,715 |
11,184 |
13,841 |
16,596 |
19,194 |
20,704 |
2. Primary Issues## |
11,599 |
13,794 |
19,366 |
24,539 |
24,733 |
26,144 |
2.1 Domestic Sectors |
9,656 |
13,522 |
17,421 |
22,493 |
24,564 |
25,129 |
2.2 Rest of the World |
1,944 |
272 |
1,945 |
2,046 |
169 |
1,015 |
3. Total Issues (1+2) |
19,314 |
24,978 |
33,207 |
41,135 |
43,926 |
46,848 |
4. Net Domestic Capital Formation@ |
9,358 |
13,662 |
17,033 |
20,812 |
23,207 |
25,053 |
5. National Income** |
30,891 |
47,054 |
54,111 |
64,068 |
74,350 |
82,560 |
6. Finance Ratio (Ratio of 3 to 5) |
0.60 |
0.53 |
0.61 |
0.64 |
0.59 |
0.57 |
7. Financial Inter-relations Ratio (Ratio of 3 to 4) |
2.01 |
1.83 |
1.95 |
1.98 |
1.89 |
1.87 |
8. New Issue Ratio ( Ratio of 2 to 4) |
1.21 |
1.01 |
1.14 |
1.18 |
1.07 |
1.04 |
9. Intermediation Ratio (Ratio of 1 to 2) |
0.68 |
0.81 |
0.71 |
0.68 |
0.78 |
0.79 |
10. Growth in real GDP at factor cost |
8.7 |
6.7 |
8.6 |
8.9 |
6.7 |
4.5 |
$ : The absolute numbers are averages of flows in current prices from 2003-04 to 2007-08.
# : Refers to issues by financial intermediaries (i.e., Banks and Other Financial Institutions).
## : Refers to issues by all sectors other than financial intermediaries.
@ : At Current Prices.
** : Net National Product at Factor Cost at Current Prices.
Note: Item no 4 and 5 are sourced from National Accounts Statistics, CSO. |
• The pattern of financing the deficit of the PCB
sector showed a substantial increase in the share
of the ROW sector (via FII, FDI and loans) during
2012-13. The share of the banking sector in the
total funding of PCB sector also increased while
that of the OFI sector declined.
• The share of OFIs in financing the resource gap
of the government sector increased sharply during
2012-13. With outflows under Small Savings
significantly lower and accruals under government
provident and pension funds higher in 2012-13,
the share of households in funding the resource
gap of the government sector also increased.
• Net financial claims issued by the ROW sector
picked up in 2012-13 mainly on account of the
RBI’s purchases of foreign currency in the context
of the surge in capital (particularly FII) inflows.
• Net financial assets of the ROW sector also
increased in 2012-13 largely reflecting the
substantial FII inflows and the strong growth in
short-term trade credits; both these flows were
mostly directed towards the private corporate
business sector.
• The financial surplus of the households, relative
to NNP, increased in 2012-13, albeit marginally.
Of the total financial surplus, accruals under life
funds, provident funds, mutual funds and Small
Savings improved in 2012-13, reversing the trend
observed over the past few years.
• The share of the banking sector in total claims
issued by the OFI sector declined from around 24
per cent in 2011-12 to around 18 per cent in
2012-13. On the other hand, the share of the
banking sector in financial uses of the OFI sector
increased from about 24 per cent to 40 per cent
over this period. The significance of the banking
sector in the sources and uses of funds of the OFI
sector has generally increased in recent years vis-a-vis the average position during 2003-04 to
2007-08.
• Loans and advances remained the most preferred
instrument, followed by investments and
currency and deposits.
• The finance ratio, the financial inter-relations ratio
and the new issue ratio dipped in 2012-13, even
as the intermediation ratio increased slightly.
|