The growth rate of broad money (M3) in 1996-97 was 15.6 per cent which was within the targetted band of 15.5 - 16.0 per cent. The real GDP is expected to have grown by 6.8 per cent. The inflation rate as measured by the change in the Wholesale Price Index was 7.3 per cent on a point-to-point basis.
A notable feature of 1996-97 was that the money and foreign exchange markets were generally calm in contrast with the turbulence witnessed in these markets in the previous year. A strong growth in bank deposits, coupled with substantial reduction in cash reserve requirements resulted in abundant liquidity in the system. However, the off-take of bank credit was subdued.