Taking into account the high expansion of money supply worldwide, and given the monetary overhang of 2005-07, it is important to contain monetary expansion in 2007-08 at around 17.0-17.5 per cent, in consonance with the outlook on growth and inflation.
The Annual Policy Statement for the year 200708 also placed aggregate deposits growth in 2007-08 at around Rs.4,900 billion and a graduated deceleration of non-food credit to 24.0-25.0 per cent in 2007-08 from the average of 29.8 per cent over 2004-07. The fiscal position of the Government, both Central and States, is undergoing consolidation in terms of targeted reduction in fiscal deficit indicators.