Subject NOT available

S.O. 3416.—In pursuance of section 17 of the Industrial Disputes Act, 1947 (14 of 1947), the Central Government hereby publishes the following award of the Industrial Tribunal (No. 2), Dhanbad, in the matter of an application under section 33A of tht said Act from Shri Abrahim Mathews, National Coal Organisation Employees Association, Dharbhanga House, Ranchi, which was received by the Central Government on the 7th :September, 1968.

BEFORE THE CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL (No. 2) DHANBAD.

(PRESENT :

Sbri Nandagiri Venkata Rao, Presiding Officer.

COMPLAINT NO. 8 OF 1968

(ARISING OUT OF REFERENCE NOS. 243 AND 244 OF 1967)

In the matter of Complaint under Section 33A of the Industrial Disputes Act, 1947.

PARTIES :

The workmen of N.C.D.C. Ltd., represented by the National Coal Organisation Employees Association, Darbhanga House;, Ranchi—Complainant.

Vs.

The employer in relation to the National Coal Development Corporation, Ltd., Ranchi and 34 others—Opp. Parties.

APPEARANCES :

On behalf of the complainant—Shri Abrahim Mathews, General Secretary, National Coal Organisation Employees Association, Dharbhangha House, Ranchi.

On behalf of the opposite parlies—None.

STATE: Bihar.

INDUSTRY: Coal.

Dhanbad, 2nd September, 1968

AWARD

Shri Abrahim Mathews, General Secretary, National Coal Organisation Employees Association, Dharbangha House, Ranchi has presented an application for permission to withdraw the complaint with liberty to file it afresh. The prayer is accepted and the complaint petition is disposed of as withdrawn. The award is made accordingly and sub- mitted under Section 15 of the Industrial Disputes Act, 1947.

(Sd.) N. VENKATA RAO, Presiding Officer,

Central Govt. Industrial Tribunal

(No. 2) at Dhanbad.

[No. 2/130/65-LRII.]

New Delhi, the 21st September 1968

S.O. 3417.—In pursuance of Section 17 of the Industrial Disputes Act, 1947 (14 of 1947), the Central Government hereby publishes the following award of the Industrial Tribunal, Calcutta, in ttje industrial dispute between the employers in relation to the Jaipuria Samla Amalgamated Collieries Limited, (Kendra Colliery), Post Office Panda- veshwar. District Burdwan and their workmen which was received by the Central Govern- ment on the 13th September, 1968.

CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL AT CALCUTTA.

REFERENCE N O. 5 OF 1968

PARTIES:

Employers in relation to the laipuria Samla Amalgamated Collieries Limited (Kendra Colliery).

AND

Their workmen.

PRESENT

Shri B. N. Banerjee—Presiding Officer.

APPEARANCES:—

On behalf of Employers.—Shri M. K. Mukherjce, Advocate. On behalf of Workmen.—Shri Patit P. Pathak.

STATE: West Bengal.

INDUSTRY: Coal Mines-

AWARD

By Order No. 6/73/67-LR-IT, dated December 30, 1967, the Government of India, in the Ministry of Labour, Employment and Rehabilitation (Department of Labour and Employment), referred the following dispute between the employers in relation to the Jaipuria Samla Amalgamated Collieries Limited (Kendra Colliery) and their workmen, to this tribunal for adjudication, namely:—

• "Whether the action of tho management of Kendra Colliery of laipuria Samla Amalgamated Collieries Limited, was justified in dismissing Shri Dinesh Singh from service, with effect from the 21st December, 19657 If not, to what relief is the workman entitled?"

2. The above reference whs heard before this tribunal on August 22, 1968. After the hearing ha'd gone on for sometime, Mr- M. K. Mukhcrjee, Advocate appearing for the employer company, and Mr. P. Pathak, appearing on behalf of the workman concerned, expressed their willingness to settle the dispute amicably- Thereupon, further hearing of tho matter was adjourned in order to enable the parties to come to a settlement. The parties to the dispute have this day filed a joint petition of compromise, before this tribunal, thereby settling tho dispute on the following terms:—

"1. That the dispute giving rise to the instant reference has been settled out of:

Court by and between the parties on the following terms ;—

(a) that the workman accepts the order of dismissal passed by the management as final.

(b) that the management agrees to pay the workman the sum of Rs, S.520/- (Rupees eight thousand five hundred twenty only) as compensation in full and final settlement of all his claims for re-instatement and for any other claims-

2. That the workman vacates the quarter of the Collieries occupied by him and: hand-over the vacant possession of the Quarter immediately the above compensation amount is paid to the workman."

3. In my opinion, the settlement is lawful and fully and completely settles the dispute. I therefore record the settlement and mark an award in terms thereof. Let the petition of settlement form part of this award. The reference is disposed of in terms of the settlement-

(Sd-) B- N. BANERJEE, Presiding Officer.

Dated, September 7, 1968

BEFORE THE CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL

REFERENCE N O. 5 OF 1968

Employers in relation to Jaipuria Samla Amalgamated Collieries Limited.

• Vs.

Their Workmen-

Represented by Colliery Mazdnor Sabha

1. That the dispute giving rise to the instant reference has been settled out of Court by and between the parties on the following terms:—•

The humble petition of both the parties above name'd most respectfully sheweth.

(a) that the workman accepts the order of dismissal passed by the management as final.

(b) that the management agrees to pay the workman the sum of Rs. 8,520/- (Rupees eight thousand five hundred twenty only) as compensation in full and final settlement of all his claims for re-instatement and for any 6ther claims.

2. That the workman vacates the Quarter of the Collieries occupied by him and hand- over the vacant possession of the Quarter immediately the above compensation amount Is paid to the workman.

Your petitioners therefore, pray that the Hon'ble Tribunal may be pleased to dispose .of the reference accortlingly.

(Sd.) R. RAMACHANDRAN,

Representing Management

Winess:

(Sd.) M. K- MUKHERJEE, Advocate. Representing the workman.

(Illegible)

(Illegible).

•Calcutta, the 7th September. 1968.

I Sri Dinesh Singh acknowledge the receipt of JRs, 8520/- (Rupees eight thousand five hundred .and twenty only).

DINESH SINGH, 7-9-68.

I acknowledge receipt the key of the

quarter vacated by the workmen.

[No. 6/73/67-LRII.1

ORDER

New Delhi, the 21st September 1968

S.O. 3418.—Whereas the Central Government is of opinion that an industrial dispute ^exists between the employers in relation to the Ashakuty Phularitend Collieries of Messrs .Ashakuty, Coal Company Limite'd, Post Office Katrasgarh, District Dhanbad and their workmen in respect of the matters specified in the Schedule hereto annexed;

And whereas the Central Government considers it desirable to refer the said dispute for adjudication;

Now, therefore, in exercise of the powers conferred by clause (d) of sub-section (1) -of section 10 of the Industrial Disputes Act, 1947 (14 of 1947), the Central Govern- :mcnt hereby refers the said dispute for adjudication to the Industrial Tribunal (No. 3), Dhanbad, constituted under section 7A of the said Act.

SCHEDULE

Whether the action of the management of Ashakuty Phularitand Collieries of Messrs Ashakuty Coal Company Limited, Post Office, Katrasgarh, District Dhanbad in terminating the services of Shri Ram Shankar Sarkar, Shot flrcr with effect from the 1st April, 1968 was justified? If not, to what relief is the workman entitled ?

[No, 2/160/68-LRII.]

BALWANT SINGH, Under Secy.

(Department of Labour and Employment)

[Office of the Chief Labour Commissioner (Central)]

ORDER

New Delhi, the 13th September 1988

S.O. 3419.—Whereas an application has been made under Section 19(b) of the Payment of Bonus Act, 1965 by Messrs Dalchand Bahadur Singh (employer) in relation to their establishments mentioned m the Schedulo below for extension of the period for the payment of bonus to their employees for the accounting year ending on 31st Decem- ber, 1967.

And -whereas being satisfied that there are sufficient reasons to extend the time I have, in exeTciso of the powers conferred on me by the proviso to clause (b) of Section 19 of the said Act read with the notification of the Government of India in the Ministry of Labour and Employment No. WB-20(42)/65 dated the 28th August, 1965, passed order -on extending the period for payment of the said bonus by the sa!3 employer by 15 days -from the due date under clause (b) of Section 19 of the Act.

Now this is published far Information of the employer and all the employees of the said ^establishment.

THE SCHEDULE

Establishments) !Nam; & address of the employor(s)

Rajnagar Colliery, M/s. Dalchand Bahadur Singh Rajnagar Colliery,

Disst. Surguja.

P. 0. Jhagmkhand Colliery. Distt, Surguja (M.P.)

[No. BA-5(ll)/68-LSI.]

O. VENKATACHALAM,

Chief Labour Commissioner (Central).

MINISTRY OF HOME AFFAIRS

New Delhi, the 6th September 1968

8.O. 3420.—In exercise of the powers conferred by section 8 of the Preventive Deten- tion Act, 1950 (4 of 1950), the Central Government hereby constitutes an Advisory IBoard with the following persons to review the cases of persons detained under the Preven- tive Detention Act by the Central Government namely :—

1. Shrl K. P. Mathur, Vigilance Commissioner, Assam, Shillong. 2. Shri A. S. Khongpai, Advocate. 3. Shri S. K. Khaund, Advocate, Assam High Court, Gauhati

2. Shri K. P. Malhur shall be the Chairman of this Advisory Board.

3. The Chairman and the other members shall for the purpose of the said Act be deemed to be holding office within the meaning of subsection (6) of section 2 of the Indian Official Secrets Act, 1923 (19 of 1923).

[No. F.61/21/68-Poll.I(B).]

G. K. ARORA, Dy. Secy.

New Delhi, the 18th September 1968

£>.O. 3422,—In exercise of the powers conferred by the proviso to Article 309 of the Constitution the President hereby makes the following rules to amend "the Secretary to the Legislative Assembly (Government of Manipur) Recruitment Rules, 1967", namely;—-

1. Short Title.—These rules may be called "Secretary to the Legislative Assembly (Gov- ernment of \ianipur) Amendment Rules, 1968".

2. In the Schedule to the "Secretary to the Legislative Assembly (Government of Mani- pur) Recruitment Rules 1967", for the entries in column No. 11 the following entries shall be substituted, namely:—

"Transfer on deputation"

Officers of Grade I of the Manipur Civil Service failing which, officers of Grade II of the Manipur Civil Service who have rendered at least 10 years service irt. a regular capacity in a duty post of the Manipur Civil Service or in an equi- valent or higher post, possessing a degree in Law and knowledge of Manipuri.

(Period of deputation ordinarily not exceeding 3 years). 1-IOTE:—For computing the 10 years service, service in an equivalent or higher post under tho Central Government, the State Government or in a State Civit Service shall also be taken into account.

[No. 1/51/67-HMTJ

A. D. PANDE, Jt. Secy-

New Delhi, the 13tfj September 1968

S.O. 3423.—In exercise of the powers conferred by the proviso to article 309 of the Constitution, read with rule 33 of the Central Civil Services (Classification, Control and Appeal) Rules, 1965, the President hereby makes the following rules further to amend the Central Civil Services (Classification, Control and Appeal) Rules, 1965, namely ;—-

1. (1) These rules may be called the Central Civil Services (Classification, Control and- Appeal) Fourth Amendment Rules, 1968.

(2) They shall come into force cm the date of their publication in the Official Gazette-

2. In the Schedule to the Central Civil Services (Classification, Control and Appeal) Rules, 1957, which is deemed to be the Schedule to the Central Civil Services (Classifica- tion, Control and Appeal) Rules, 1965, by virtue of rule 33 thereof,.—

In "Part II-Central Civil Services, Class II" and

Tn "Part ]II-CentraI Civil Services, Class III,"—

(a) for tho words "Chief Engineer, Central Public Works Department", wherever they occur, the words "Engineer-in-Chicf, Central Public Works Department"" shall be substituted;

(b) for tho words "Additional Chief Engineer (Vigilance), Central Public Works Department" wherever they occur, the words "Chief Engineer (Vigilance), Central Public Works Department" shall be substituted.

[No. 7/6/68-Ests(A).T

New Delhi, the nth September 1968

S.O. 3424.-~In exercise of the powers conferred by the proviso to article 309 and clause (5) of article 148 of the Constitution, and in consultation with the Comptroller and Auditor-General of India in relation to persons serving in the Indian Audit and Accounts Department, the President hereby makes the following rules further to amend the Central Civil Services (Conduct) Rules, 1964, namely:—

1.(1) These rules may be called the Central Civil Services (Conduct) Amend- ment Rules, 1968.

(2) They shall come into force from the 'date of their publication in the Offlcia Gazette.

2. In the Central Civil Services (Conduct) Rules, 1964. for rule 21, the following rule shall be substituted, namely:—

'21. Bigamous Marriages—(1) No Government servant shall enter into, or contract, a marriage with a person having a spouse living; arid

(2) no Government servant, having a spouse living, shall enter into, or contract, a marriage with any person:

Provided that the Central Government may permit a Government servant to enter into, or contract, any such marriage as is referred to in clause (1) or clause (2), if it is satisfied that:—

(a) such marriage is permissible under the personal law applicable to such Government servant and the other party to the marriage; and

(b) there arc other grounds for so doing.

[No- 25/17/68-Ests.CA).}

P. S. VENKATESWARAN. Under Secy.

New Delhi, the 19th September 1968

S.O. 3425.—In pursuance of sub-paragraph (2) of paragraph 18 of the Sixth Schedule to tue Constitution, the President hereby directs that, until further orders, the Governor of Assam "hall, in relation to the tribal areas of Assam specified in Part B of the table appended to paragraph 20 of the said Schedule, also discharge, subject to the control of the President, the functions of the Central Government under sub-clauses (c) and (d) of clause (8) of section 2 of the Official Secrets Act, 1923 (19 of 1923).

[No. 21/28/67-Poll.IL]

S. S. VARMA, Dy. Secy.

MINISTRY OF FOOD, AGRICULTURE, C, D. & C.

(Department of Food)

New Delhi, the 11th September 1968

S.O. 3427.—In exercise of the powers conferred by Section 3 of the Essential Com- modities Act, 1955 (10 of 1955), the Central Government hereby makes the following Order further to amend the Fruit Products Order, 1955, namely:—

1. This Order may be callod the Fruit Products (Amendment) Order, 1968.

2. In clause 1 of the Fruit Products Order, 1955, in sub-clause (2), the words "ex- cept the State of Jammu and Kashmir" shall be omitted.

[No. 21(25)/66-Tech.L]

R. BALASUBRAMANIAN, Jt. Secy.

DEPARTMENT OF COMMUNICATIONS

(P. & T. Board)

tfetc Delhi, the 16th September 1888

S.O. 3428—In pursuance of para (a) of Section III of Rule 434 of Indian Telegraph Rules. 1931, as introduced by S.O. No. 627 dated 8th March, 1960, the Director- General, Posts and Telegraphs, hereby specifies the 16th October, 1968 as the date of which the Measured Rate System will be introduced in AMRELI Telephone Exchange Bhavnagar in Gujarat

[No. 5-51/68-PHB(4).]

D. R. BAHAL,

Asstt. Director General (PHB).

MINISTRY OF COMMERCE

New Delhi, the 12th September 1968

S.O. 3430.—In exercise of the powers conferred by the proviso to article 309 of the Constitution, the President hereby makes the following rules regulating the methods of recruitment to Class IV posts in tho Forward Markets Commission, Bombay, namely:

. 1. Short rifle and commencement—(1) These rules may be called the Forward Mar- kets Commission (Class IV posts) Recruitment Rules, 1968.

(2) They shall come into force from the date of their publication in the official gazette.

2. Application—These rules shall apply for recruitment to Class IV posts in the Forward Markets Commission as specified in column 2 of the Schedule hereto annexed.

3. Number of posts, classification and scales or pay.—The number of posts, their classification and the scales of pay attached thereto shall be as specified in columns 3 to 5 of the said Schedule.

4. Method of recruitment, age UmH and other qualifications.—The method of recruit- ment to the said posts, age limit, qualifications and other matters relating thereto shall be as specified in columns 6 to 14 of the schedule aforesaid:

Provided that the upper age limit specified for direct recruitment may be relaxed in the case of Scheduled Castes, Scheduled Tribes, and other special categories of persons In accordance with the orders of the Central Government issued from time to rime.

5. Disqualifications.—(a) No person, who has more than one wife living or who having a spouse living, marries in any case in which such marriage is void by reason of

its taking place during the life time of such spouse, shall be eligible for appointment to "ny of said posts; and

(b) no woman, whose marriage is void by reason of the husband having a wife living at the time of such marriage or who has married a person who has a wife living at the time of such marriage, shall bo eligible for appointment to any of the said posts:

Provided that the Central Government may, if satisfied that there are special grounds for so ordering, exempt any person from the operation of this rules.

6. Power to relax.—Where the Central Government is of the opinion that it Is ne- cessary or expedient to do so, it may, by order, for reasons to be recorded in wilting, re- lax any of the provisions of these rules with respect to any class or category of persons or posts.

FORWARD MARKETS

GOVERNMENT

BOM

Recruitment Rules for Class

Name of the ' Classifica- • Scale of pay

SI. No. post.

No. of post. tion

Whether selection

Educational and¹'other qualiflcaviorE rcqiirtd

Age limit for direct recruits.

i

or non- selcctior post.

i

2

8

6

3

4

5

7

Rs.

i

i Gestetner

Essential :

Operator.

Non- selection

80—1—85

—2—95—

EB—3—no

(a) Passed Middle School

Between I 8 & 35 years.

Examination.

2 3

a

I

3

21

4

COMMISSION

op INIDA

BAY

IV Posts.

In case of recruitment

Period of probation

by promotion/trasnfer etc. grades from which

to be made.

Method of recruitment i.e. whether by direct recruitment/promotion or by transfer percentage or vacancies to be filled by various methods.

If Circum- D.P.C. stances exists, what in which Is its com- U.P. S.C. position is to be consulted in making recruit- ment.

T

Whether age and educational qualifications prescribed for direct recruits will apply in the case of recruitment bj promotion/ transfer.

12

10

11

9

2 years

N.A.

Promotion : from among:

Not applicable

Class IV D.P.C. By promotion failing which by transfer and failing both direct

recruitment

(1) Daftrics und (2) Jamadarwho have rendered at least 3 years service in the grade.

By promotion failing Promotion:

2 yeare

N.A.

. Will be from peons whi

Not applicable.

Class IV a D.P.C

which by transfer and failing both direct recruitment.

have put in 3 years service in the grade.

Promotion:

Will be from peons

2 years

V 1 N.A. Not applicable.

Class I D.P.C. By promotion failing which by transfer and failing both direct recruitment.

who have put in 3 years service in the grade.

Not

By direct recruitment. Not applicable. Not

2 years

N.A-

applicable.

applicable.

2

I

6

3

5

4

7 8

2

Desirable :

Hamals

5

70—t—80—

EB—1—85.1

Between . 18 & 25 Experience of working

Not ipplicable

years.

in a Govt. office.

il

G.C.S. Class IV Non- gazetted Non- Mlnisteris

2

6 Chowtydar

1 Not Between Desirable :

70—1—80—

EB—1—85.

applicable. 18 & 25 Experience of working

years. in a Govt. office.

ted

iterial

G.C.S. Class IV Non-gazetl Non-MiniE

2

Sweepers

Not Between Desirable:

7

applicable. 18 & 25

EB—13-85.

years. Experience of working

in a Govt. offlfie.

G.C.S. Class IV Non- gazetted Non- MlniBterial 1

11

10

12

9

13

By direct recruitment. Not applicable.

Not

N.A. 2 years

applicable.

Not applicable.

By direct recruitment.

a years

Not applicable.

N.A. Not

Not applicable. applicable.

By direct recruitment. Not applicable.

2 years

Not N.A. Not

applicable.

applicable.

[No. F. 18(l)-CG/68.]

SURENDRA SINGH, Dy Secy.

New Delhi, the 13th September 1868

S.O. 3431.—In exercise of the powers cpnferred by section 4 of the Tea Act, 1953 (29 of 1953), read with rules 4 and 5 of the Tea Rules, 1954, the Central Government hereby appoints (1) Mr. D. E. Macintosh and (2) Shri K. R. Bellie as members of the Tea Board for the period upto and inclusive of the 31st March, 1969, in the place of (1) Mr. J. B. Soutar and (2) Shri R. Raman Nair respectively, who have since resigned from the membership of the Tea Board and makes the following amendment* in the notification of the Government of India in the Ministry of Commerce No. S.O. 1143, dated the 6th April, 1966, as subsequently, amonded namely:—

In the said notification:—

(1) under the heading "representing owners of tea estates and garden* and growers of tea", for entry 15, the following entry shall be suortituted, namely:—

"15. Mr. D- E. Macintosh,

C/o Kanan Dcvan Hills Producers Co. Ltd., P.O. Munar, High Ranges, Kerala State.";

(2) under the heading "Representing persons employed in tea estates and garflens",

for

entry 35, the following entry shall be substituted, namely:—

"35. Shri K. R. BeHie,

General Secretary, Niloiri District Estate Workers Union, 'Rokcby', Coonoor-1, Nilgiris".

[No. 7(2)-PlantCA)/65.] N. N. MALHAN, Under Secy.

(Office of the Chief Controller of Imports and Exports)

ORDER

New Delhi, the tlnd August 1968

S.O. 3432.—M/8. Asre Jadid Urdu Daily, 9-B, Bolai Dutt Street, Calcutta were granted an import licence No. P/AU/1252235/C/XX/24/C/H23.24 dated 15th October, 1966 for R" 64168 (Rupees Sixty four thousand one hundred and sixty eight only). They have applied for the issue of a duplicate Exchange Control purposes copy of the said licence on the ground that the original Customs Purposes Exchange Control copy has been lost/ misplaced It is further stated that the original Customs Purpose/Exchange Control copy was registered with the Customs authorities at XXX Bank Ltd.. unutihsed and nulmed fully/partly. It was utilised for Rs. Nil and the balance available on it was Rs. 6416H,

2 In support of this contention, the applicant has filed an affidavit along with a certificate from Notary Public, Calcutta. I am accordingly satisfied that the original Exchange Comrol Purposes copy of the said licence has been lost. Therefore, m exercise of the powers conferred under Sub-clause 9 (cc) of the Import (Control) order 1955- dated 7th December, 1955 as amended, the said original Exchange Control PorpMw _ copy of licence No. P/AU/1252235/C/XX/24/C/H/23.24 dated 15th October, 1966 issued to M/s. Asre Jadid Urdu Daily, Calcutta is hereby cancelled.

3. A duplicate Exchange Control Purposes copy of the said licence is being issued

separately to the licensee.

[No. 44-V/A-62/68-69/NPCTB.]

S. A. SESHAN,

Deputy Chief Controller of Imports and Exports.

(Office of the Chief Controller of Imports and Exports)

ORDERS

New Delhi, the 6th September, 1968

S.O. 3433.-A licence No. G]AU[1035074|C|XX|26|C|H|26 dated the 1st April, 1968 for the value of Rs. 85,232 for the import of Insolation Material etc., as per list attached

with the licence was issued to the Chief Purchase Officer, Amalgamated Electricity Corpo- ration of Moradabad 12, Krishana Ashram, Moradabad (U.P.), with a Letter of Authority in favour of M/s. Burn and Co. Ltd., Reyrolla Agency, 12, Mission Row, Calcutta-1.

2. Thereatfcr, show cause noticos No. 10(20)/68-Vig/2930 and 10(20)[68-Vigj2931 both dated 13th August, 1968 were issued to the above mentioned parties asking them to show cause within ten days as to why the said licence should not be cancelled on the ground that the same was obtained by them on the basis of forged Sanction issued by the Ministry of Irrigation and Power, New Delhi.

3. The aforesaid show cause notice addressed to the Chief Purchase Officer, Amalga- mated Electricity Corporation of Moradabad, 12, Krishana Asharam, Moradabad (U.P.) has been received back undelivered from the Postal authorities with the remarks "Not Known" while no reply has been received from the M/s. Burn and Co., Ltd., Calcutta though the time limit of ten days mentioned in the show cause notice has expired on 23rd Aueust 1968.

4. The undersigned has carefully examined the case and has come to the conclusion that the said licence has been obtained on the basis of false and fabricated documents and tho licensees and Letter of Authority holders are avoiding replies to the show cause notices.

5. Having regard to what has been stated in the preceding paragraph, the undersigned is satisfied that the licence in question should be cancelled or otherwise rendered ineffective.¹ Therefore, the undersigned in exercise of the powers vested in him under Clause 9(a) of the Imports (Control) Order, 1955 hereby cancelled the licence No. No. G|AU|1035O74]C| XX|26|C]H|26 dated 1st April, 1968 for Rs. 85,232 issued in favour of the Chief Purchase Officer, Amalgamated Electricity Corporation of Moradabad, 12, Krishana Asharam, Mora- dabad (U.P,) and also the letter of authority in favour of M/s. Burn and Co, Ltd., Reyrolla Agency, 12, Mission Row, Calcutta-1.

[No. 10(20)/68-Vig,]

S.O. 3434.—A licence No. G/AU/1035202/C/XX/27/C/H/26 dated 18th April, 1968 for tho value of Rs. 80,725 for the import of goods as per list attached with the licence was issued to the Chief Purchase Officer, Saharanpur Electricity Corporation, Bhali Ram Build- ing, Jawala Nagar, Saharanpur (U.P.) with a Letter of Authority in favour of M/s. Eaaun Engineering Co, Ltd., 5-7 Second Line Bench, Bombay.

2. Thereafter, show cause notices Nos. 10(20)/68-Vig/2929 and 10(20)|68-vig|2926 both dated I3th September, 1968 were issued to the above mentioned parties asking them to show cause within ten days as to why the said licence should not be cancelled on the ground that the same was obtained by them on the basis of forged Sanction issued by the Ministry of Irrigation and Power, New Delhi.

3. The aforesaid show cause notice addressed to the Chief Purchase Officer, Saharan- pur Electricity Corporation, Bhali Ram Building, Jawala Nagar, Saharanpur (U.P.) has been received back undelivered with the remarks from tho Postal authorities that the party left without address and the show cause notice has expired on 23rd August, 1968 and where- as the show cause notice addressed to M/s. Ea_sun Engineering Co. Ltd., 5-7 Second Line Bench, Bombay hfti been received back undelivered from the Postal authorities for want of complete address and the notice has been reposted on their Madras address with copiev to their offices at Bombay/New Delhi.

4. The undersigned has carefully examined the case and has come to the conclusion that the said licence has been obtained on the basis of false and fabricated documents and the licensee h evading reply to the show cause notice.

5. Having regard to what has been stated in the preceding paragraph, the undersigned in exercise of the powers vested in him under clause 9(a) of the Imports (Control) Order, 1955 hereby cancel the licence No. G|AUJiq35202|C|XX[27|C|H|26 dated 18th April, 1968 for Rs. 80,725 issued in favour of the Chief Purchase Officer, Saharanpur Electricity Corporation, Bhali Ram Building, Jawala Nagar, Saharanpur (U.P.) and also the letter of authority in favour of M/s. Easun Engineering Co, Ltd., 5-7 Second Line Bench Bombay.

[No. 10(20)/68-Vig.j

C O. 3435.—A licence No. G/AU/1035236/C/XX/27/C/27, dated 27th April, 1968 for the value of Rs. 89.275 for the import of Insolation Material etc., as per list attached with the licence was issued to the Chief Purchase & Stores Officer, Bharatpur Electricity

Corporation, Railway Road, Bharatpur (Rajasthan), with a letter of Authority in favour of M/3. SLM-Munck Lai Industries Ltd., Sir P.M. Road, Bombay.

2. Thereafter, show cause notices Nos. 10(20) |68-Vig|2927 and 10(20) |68-Vig[2928 both dated 13th August, 1968, were issued to the above mentioned parties asking them to show cause within ten days as to why the said licence should not bo cancelled on the ground that the same was obtained by them on the basis of forged sanction issused by the Ministry of Irrigation and Power, New Delhi.

3. The Show Cause Notice addressed to the Chief Purchase & Stores Officer. Bharatpur Electricity Corporation. Railway Road, Bharatpuj (Rajasthan) has neither been received back undelivered nor has any reply been received from him, though the time limit of ten days mentioned in the Show Cause Notice has expired on 23rd August, 1968, while the letter of authority holder viz.. M/s- SLM-Manek Lai Industries Ltd., Bombay have denied to be in possession of the licence in question.

4- The undersigned has carefully examined the case and has come to the conclusion that the said licence has been obtained on the basis of false and fabricated documents and the licensee is avoiding reply to the show cause notice.

5. Having regard to what has been stated in the preceding paragraph, the undersigned is satisfied that the licence in question should be cancelled or otherwise rendered ineffective. Therefore, the undersigned in exercise of the powers vested in him under clauie 9(a) of tfca Imports (Control) Order, 195J, hereby cancel the licence No. G/AU/1035236/C/XX/27/ C/H/27, dated 27th April, 1968 for Rs. 89,275 issued in favour of Chief Purchase and Store* Officer, Bharatpur Electricity Corporation, Railwuy Road, Bharatpur (Rajasthan) and also the letter of Authority in favour of M|S, SLM-Manek Lai Industries Ltd., Sir P.M. Road, Bombay.

[No. 10(20) /68-Vig.l

B. D. BHATTACHARYA,

Dy. Chief Controller of Imports & Exports.

(Office of the Jt. Chief Controller of Imports and Exports)

(Central Uccnatug Area)

ORDER

New Delhi, the 13th. September 1968

S.0. 3436 A licence No. P/SS/1607749/C dated 22nd September, 19"7 of the value of Rs, 1240 for Copper, Tin & Lead was issued to M/s. M. C. Handa Brothers* C/o Bawa Bhagat Singh Bballa, Land Lord, Pinjore, Diatt. Ambala.

2. Thereafter, a show cause notice No. M-15/67/ENF/CLA/4719 dated 19th August, 1968 was issued asking them to show cause within 15 days as to why the said licence in their favour should not be cancelled on the ground that the Central Government fa satisfied that the licence will not serve the purpose for which it has been granted in terms of Clause 9, sub-clause (cc).

3. The said show cause notice sent to the firm has been received back undelivered with the remarks of the Postal authorities "No such firm".

4. Having regard to what has been stated in the preceding paragraph, the undersigned to satisfied that the licence in question should be cancelled or otherwise rendered ineffec- tive. Therefore, the undersigned, in exercise of the powers vested in him under Clause 9 sur>clause (cc) of the Imports (Control) Order. 1955 hereby cancel the Licence No. P/ SS/1607749/C dated 22nd September. 1967 for Rs. 1240 issued in favour of M/s. M. C. Handa Bros., C/o Bawa Bhagat Singh Bhalla, Land Lord, Pinjore (Distt. Ambala).

[No. M-15/67/ENF/CLA/3909.}

J. S. BEDI,

Jt Chief Controller of Imports & Exports.

MINISTRY OF STEEL, MINES AND METALS

(Department of Mines and Metali)

New Delhi, the 12th September 1968

8.O, 3437—In exercise of the powers conferred by sub-section (1) of section 7 of the Coal Bearing Areas (Acquisition and Development) Act, 1957 (20 of 1957) and of all other powers enabling it in this behalf, the Central Government hereby rescinds the notifica- tion of the Government of India in the then Ministry of Mines and Metal* No. S.O. 420, dated the 29th lanuary, 1966, published at pages 365 to 367 in Part II section 3-sub- section (ii) of the Gazette of India, dated the 5th February. 1966.

[No. C2-24(l)/66.]

S.O. 3438.—In exercise of the powers conferred by sub-section (1) of section 7 of the Coal Bearing Areas (Acquisition and Development) Act, 1957 (20 of 1957) and of "U olfeer powers enabling it in this behalf, the Central Government hereby rescinds the notifica- tion of the Government of India in the then Ministry of Mines and Metals No. S.O. 421, dated the 29th January, 1966, published at pages 367—372 In part IT. Secfloii 3-rob-section (ii) of the Gazette of India, dated the 5th February, 1966.

[No. C2-24(l)/66(i>.l

RAM SAHAY, Under Secy-

MINISTRY OF TRANSPORT ft SHIPPING

(Transport Wing)

New Delhi, the list September 1968

8.O. 3439.—In exercise of the powers conferred by section 4 of the Merchant Shipping Act, 1958 (44 of 1958), read with rule 3 and sub-rule (1) of rule 8, of the National Shipping Board Rules, 1960, the Central Government hereby appoints Shri K. C. Madsppa a" a member of the National Shipping Board to represent the Central Government on that Board, and makes the following further amendments in the notification of the Government of India in the Ministry of Transport and Shipping (Transport Wing) No. S.O. 2319, dated the 6th July, 1967. namely:—

In the saM notification,—

(1) in the list of members shown as Central Government representative*, after Item 10A and the entry relating thereto, the following item and entry shall be inserted, namely:—

"10-B Shri K. C. Madappa";

(2) item 21 and the entry relating thereto shall be omitted;

(3) the following paragraph shall be inserted at the end, namely:—

"2. The Central Government hereby appoints Shri N. K. Gopalan Nair, Deputy Director General of Shipping, to be the Secretary of the Board".

[No. 37-MD(4)/67.J

M. K. BHATE, Under Secy.

MINISTRY OF INFORMATION AND BROADCASTING

ORDER

New Delhi, the 21st September 1968

S.O. 3440.—-In pursuance of the directions issued under the provisions of each of the enactments specified in the First Schedule annexed hereto, the Central Government after considering the. recommendations of the Film Advisory Boarti, Bombay hereby approves the film specified in column 2 of the Second Schedule annexed hereto in Gujarati to be of the description specified against it in column 6 of the said Second Schedule.

THE FIRST SCHEDULE

(1) Sub-section 4 of the Section 12 and Section 16 of the Cinematograph Act, 1952 (Central Act XXXVII of 1952).

(2) Sub-section (3) of Section 5 and Section 9 of the Bombay Cinemas (Regulation) Act, 1953 (Bombay Act XVU Qf 1953).

(3) Sub-section (4) of Section 5 and Section 9 of the Saurashtra Cinemas (Regula- tion). Act, 1953 (Saurashtra Act XVII of 1953).

THE SECOND SCHEDULE

Title of the film

S. No.

Name of the Producer

Name of the

Applicant

"Length 35 mm

Whether a Scientific film or a film intended for educational pur- poses or a film dealing with n*ws and current events or a documen-

tary film

2

I

6

3

4

5

i

577-44 M

Vikas Na Vardan (Kaira District)

DJ:um -ntary film, (for rifeaai in Gujarat Circuit only).

Dirj>:o: of Inform ition Gov-mm-nt of Gujarat Sachivayala, Ahm:dibid,

[No. F. 24/1/68-FP App. 1289.]

ADDENDUM

New Delhi, the 12th September 1968

S.O. 3441 In the Schedule to this Ministry's S.O. No. 2948 dated 23rd August, 1968 appearing in the Gazette of India, Extraordinary Part II, Section 3, Sub-section (ii) No. 297 dated 27th August, 1968 please add against item 4 in column 3 the figure and letter viz., "394. 40M".

[No. F. 24/1/68-FP App. 1286.]

BANU RAM AGGARWAL, Under Secy.

MINISTRY OF FINANCE

(Department of Economic Affairs)

New Delhi, the 10th September 1968

REPORT OF THE CENTRAL BOARD OF DIRECTORS OF THE RESERVE BANK OF INDIA For the year Juh 1, 1967—June 30, 1968

S,O. 3442.—In accordance with section 53(2) of the Reserve Bunk of India Act, 1934,. the Central Board of Directors has submitted to the Government of India the following; report on the working and accounts of the Bank for the year ended 30th June, 1968.

I. OVERALL TRENDS IN THE ECONOMY

After two years of successive droughts and serious imbalances in the economy, the year July 1967—June 1968 was characterised by a marked improvement in the supply situation both in respect of foodgrains and of industrial raw materials, a reversal of rising trend in prices and an improvement in the balance of payments position. Industrial produc- tion remained sluggish over the first half of the year, but it has begun to pick up siuce then. National income at constant prices during the fiscal year 1967-68 is estimated to have risen by 9.3 per cent as against a rise of only 1.7 per cent in 1966-67 and a decline of 4.7 per cent in 1965-66. The external accounts situation too showed some improvement attributable partly to a reduction in imports and partly to better export performance. The foreign exchange reserves benefited from this as well as from ether special factors, such as a net drawing of $32 million from the I. M. F. and special deposits of $46 million by the I.B.R.JD. and rose as a result by $104 million in contrast to a sharp fall of $160 million during the year July 1966—June 1967. With the greater room for manoeuvre in the economy the accent of policy shifted from control and correction of inflationary pressures to the promotion of recovery, especially in the industrial sector affected by recessionary demand conditions. These developments hud a favourable impact on the capital market which showed a somewhat better tone.

2. The production of foodgrains in the crop year 1967-68 is estimated to be higher by about 29 per cent over that in the previous year. While the satisfactory monsoon has been a major contributory factor the result is also related to the additional production poten- tial built up in recent years through spread of new techniques of cultivation, particularly the High-Yielding Varieties Programme and the Intensive Agricultural District Programme, and the larger availability of inputs like seeds, fertilizers, and posticides. This is reflected' in the fact that foodgrains production in 1967-68 was 8 per cent higher than in 1964-65 when weather conditions, on the whole, were even more favourable. The industrial sector which has been slu,ggish since end-1965, continued to remain so till the end of December 1967. Index of Industrial Production (Base: 1960=100) for January-April 1968 shows, however, that the level of output was higher by a little over 6 per cent than in the cones- ponding period of last year. This improvement in the growth rate is attributable to- better availability of raw materials, revival of demand and measures taken to stimulate industrial production. The major industries which contributed to the rise in growth rate- were cotton textiles, vanaspati, industrial machinery, aluminium manufactures, fertilizers and paper and paper products. With the special measures taken to promote exports, the export demand for industrial products such as cotton textiles, iron and steel and some-, items of engineering goods has gone up.

3. Monetary resources (that is, currency with the public and aggregate deposits of banks) increased during the year by about 11.0 per cent as against a rise of 8.3 per cent: during the previous year. The major factor contributing to this expansion was the ex- tension of substantial credit by banks for food procurement operations. Bank credit to Government and a favourable turn in foreign exchange reserves also had a significant expansionary impact. A close watch was kept on the situation to ensure that the growth- in liquidity was not materially higher than that in real output as happened last year when liquidity had increased by 8.7 per cent as against a marginal rise of 1.7 per cent in national output. As u result, there was a considerable easing off of the pressure from the monetary side on available supplies. The Index Number of Wholesale Prices (Base: 1952-53 = 100) showed a decline of 6.1 per cent over the year July 1967—June 1968 in contrast to sharp rises of 15.8 per cent and 18.3 per cent in 1966-67 and 1965-66 respec- tively. About 55 per cent of the decline in prices was on account of food articles and 54 per cent because of industrial raw materials and manufactures, The sizeable decline in the price level during the busy season of 1967-68 stands out in favourable contrast to the price increases which took place in corresponding periods during the previous two years. The extent of the decline was even larger than in 1964-65, a year of very good crops. Since the last week of March 1968 prices have tended to edge up but the rate of increase is much slower than is usually the case at this time of the year and towards the close of the year the Index remained around 204, which was about 6 per cent lower than the level aj year ago.

4. The external payments situation also registered a modest improvement. There wes a swing in the foreign exchange reserves from a decline of $160 million in the year July 1966—June 1967 to an increase of $104 million in the year under review. Apart froiti net drawings from the l.M.F. and the special deposits Irom the I.B.R.D., the improve- ment in foreign exchange reserves was attributable to a decline in imports and a rise in exports. A substantial fall in food and raw jute imports consequent on increased domestic production was responsible for a reduction of 5 per cent in total imports during the financial yenr 1967-68. The increase in exports, though modest (3.6 per cent), was significant insofar as it represented a reversal of the declining trend of Ihc post-devaluation p"riod. The bulk of the increase in exports took place under non-traditional items. Debt servicing continued to be a strain on reserves but its impact was to some extent lessened by the rescheduling of debt as well as refinancing by some members of the Aid India •Consortium and the special deposits from the I.B.R.D.

5. Economic policies in the first quarter of the year, when the price situation was .difficult, were geared primarily to the control of inflationary pressures, ensuring equitable distribution of foodgrains and providing incentives on a selective basis for increased production. With the easing of pressure on prices the accent of policy shifted to the promotion of a more broad-based revival of the economy. The stress on agricultural Im- provement remains; the aim is to secure continuing gains in production through the extension of the area under High-Yielding Varieties and other Programmes, adoption of scientific methods of cultivation and better water management. The support prices of agricultural commodities have been raised in order to provide an adequate Jncentite to the farmer for increasing production. It has also been decided to build up a sHekble buffer stock of foodgrains through procurement and imports. The total procurement of foodgrains during the year up to the end of June 1968 amounted to 5.8 million tonnes. During the same period, the purchases made by the Pood Corporation of India were 3.7 million tonnes.

6. In order to stimulate industrial production, licensing restrictions were further relaxed and credit facilities enlarged Fiscal and monetary measures were taken during the year to promote savings, investment and exports. The Bank rate was reduced from € per cent to 5 per cent on March 2, 1968. Action was also taken to icduce the level of interest rates on bank advances and deposits.

7. A major development in the institutional field during the year was the enunciation "by Government of a policy of "social control" of commercial banks. The object of this move is to facilitate a more purposeful distribution of bank credit and to correct the -excessive association of banks with particular industrial or business interests. The National •Credit Council, constituted in December 1967, is designed as a forum to assist the Govern- ment and the Reserve Bank in the task of allocating credit among the different sectors in conformity with the objectives of planning. The Deputy Prime Minister and Minister of Finance presides over the Council and its membership includes representatives from commercial banks, the co-operative sector, large, medium and small-scale industries, agri- culture, trade including export trade and certain professional groups. The Council Is to study continually the credit requirements of various sectors, the resources available and the ways and means of augmenting them and provide guidelines for action by the banking system. Legislation designed, inter alia, to secure a reconstltutlon of the Boards of Directors of the Indian commercial banks, appointment of professional bankers as full- time Chairmen and prohibition of loans and, advances to Directors and their concerns has been taken in hand. Each foreign bank would be expected to set up an Advisory Board consisting of Indians (with the exception of the Chief Executive Officer when he is a member) on lines similar to those prescribed for Indian banks. Meanwhile, both the major Indian banks and foreign banks have taken steps towards this end.

Output, Prices and Policy Measures :

8. The expected overall increase in agricultural output in 1967-68 was 20 per cent. Al- though this represented in part a recovery from the low level of the previous drought year, it would still compare favourably with the previous peak level reached in 1964-65. Food- grains output, estimated at 95-6 million tonnes, that is, some 2t million tonnes more than in 1966-67 was 29 per cent higher than in the previous year and about 8 per cent above the 1964-65 level. The rise In the production of commercial croos with the singular exception of sugarcane was equally satisfactory. The output of raw jute is estimated ttt 6.4 million bales which is about 20 per cent higher than In the preceding year. The -output of cotton is also estimated to show a rise of the same order. The output of major -pilseeds is estimated to have racorded a sizeable increase over the previous year. Official estimates of groundnut production are placed at 5.8 million tonnes as against 4.4 million tonnes in the previous year. The substantial improvement in agricultural output during 1967-68 was the result of the favourable weather conditions during the year, the additional production potential built UP during the last few years, extension of area under the new •agricultural strategy and the spread of new techniques of cultivation.

9. The deceleration in the industrial growth rate, which had set in towards the end of 1965, continued during the first half of the year. This was due to the persistence of MUpply bottlenecks for some agriculture-based industries and the slackness in demand tor a number of capital goods and consumer goods industries. The first four months of 1968 (i.e. January—April 1968) witnessed a recovery, the index showing a rise of 6.4 per cent over the corresponding period of 1967. The pick-up in the growth rate reflects the impact of incentives provided by the Government for stimulating industrial production and of the improved supply situation of industrial raw materials, spares and components- The overall effect of reduced output during the first six months (July—December 1967) and the improvement during the following four months has been to raise the Index of Industrial Production for the period July 1967 to April 1968 marginally by about one per cent, i.e., the same rate of growth as in the corresponding period of the previous year.* With this overall picture, several important industries such as fertilizers, petroleum product*, aluminium manufactures, radio receivers, paper and paper products, have shown sizeable increases,

10. The improvement in the supply of foodgrains and industrial raw materials was duly reflected in the price level. The persistent upward trend in prices of the two pre- vious years was halted and reversed. Over the period July 1967—June 1968, the wholesale prices index {Base : 1952-53 = 100) registered a fall of 6.1 per cent as compared with in- creases of 15.8 per cent and 18.3 per cent during the preceding two years of 1966-67 and 1965-66, respectively. Prices of industrial raw materials declined by 17.5 per cent and those of "food articles" and "manufactures" by 5.8 per cent and 1.9 per cent, res- pectively. On the other hand, consumer prices have not fallen so far. In fact, the All-India Consumer Price Index for Working Class (Base: 1949=100) (showed a rise, though of a smaller order, of 1.4 per cent over the year July—June as compared with 14.1 per cent during the previous year.

11. Among food articles, rice prices showed an initial decline with the arrival of the crop in the market' but they have been rising consistently since the end of Deoember 1967. Over the year under review they showed a rise of 4.2 per cent. Prices of wheat, jowar and bajra declined by as much as 17.3 per cent, 12.3 per cent and 19.4 per cent, res- pectively. Pulses and edible oils recorded substantial declines in their prices (34.2 per ceni and 34.4 per cent). Only two commodities of common consumption, vh., sugar Mid gur showed increases of 14.7 per cent and 10.3 per cent respectively. The main factor behind the rise in the prices of these commodities was the stagnant sugarcane output. The price index for sugar rose also because of the partial decontrol of sugar. Among industrial raw materials, prices of oilseeds declined by 37.2 per cent, while those of raw cotton and raw jute increased by 12.4 per cent and 14.6 per cent respectively. Raw cotton prices rose largely due to heavy buying by mills to build up their stocks which had been depleted earlier.' In the case of raw jute, prices declined initially and even fell below the support prices fixed for the 1967-68 season. In the latter half of the year, how- ever, they rose again as a result, among other things, of purchases by the S.T.C. and the Jute Buffer Stock Association. Among 'manufactures', the price index for which recorded a fall for the first time since 1960, intermediate products declined by J2.2 per cent, •while finished products recorded a nominal rise of 0.4 per cent.

12. The emphasis of economicpolicy in respect of agriculture has been on securing progressive increases in output. The key. elements in this policy have been: extension of the High-Yielding Varieties and other similar Programmes, improvement In availability of inputs, extension of the intensive development approach to pulses and other food crops as well as commercial crops and the fixation of support prices for both food and com- mercial crops at levels remunerative to the agricultural producer,

13. With a view to meeting instability arising out of wide fluctuations in agricultural production from year to year both in respect of supplies and prices and also to progressively reduce the country's dependence on imports of agricultural commodities, it has been decided as H first step to build up a buffer stock of foodgrains of about 3 million tonnes, this year. It is also proposed to import 7.5 million tonnes of foodgrains in 1968 to be used partly for stockpilling. Procurement programmes have been intensified and a target of 7 million tonnes for kharif and 2 million tonnes for rabi has been fixed. Total procurement amounted to 5.8 million tonnes during the year up to end-June 1968. The Food Corporation of India has been assigned a major role in the procurement drive. The system of zonal restrictions on movement of foodgrains and of public distribution was generally maintained. As at

•Recently, the Central Statistical Organization has revised the Index of Industrial Production (Base ; 1956=100) to base 1960—100, with many structural changes therein. According to the original Index, there was an increase of 1.4 per cent in the calendar year 1967.

the end of December 1967, a little more than half the total population was covered by statutory and informal rationing.

14. In pursuance of the policy of ensuring remunerative prices to the farmer, minimum support prices of a numher of agricultural commodities—foodgrains and mn-foodgrains —were revised upwards. In respect of cotton, statutory price controls were removed, but support prices at higher levels than the previous floor prices were announced. For jute also, minimum support prices for 1967-68 season were raised. To stabilise raw jute prices, the Jute Commissioner issued minimum purchase quotas to mills and the Juto Buffer Stock Association. The State Trading Corporation also entered the market Bnd made pur- chases. A number of measures were taken to stimulate the production of sugar. The mini- mum price of sugarcane was raised in order to arrest the declining trend in the area under this commercial crop and also to enable the sugar industry to get adequate supply of cane. The partial decontrol of sugar which was introduced from 1967-68 season envisaged free- dom for the sugar producers to dispose of 40 per cent of their production during 1967-68 season in the free market, subject to issue of periodical release orders by the Government. Besides, the basic excise duty on sugar was reduced the benefit of which was given to the consumer. A rebate WBS also allowed in the excise duty on sugar production in 1967-6S which is in excess of SO per cont of the production in the 1966-67 season. Alongside the incentives given for increasing domestic production, substantial imports were made also of certain industrial raw materials like raw cotton and vegetable oils in order to feed the requirements of domestic industries.

15. Despite increases in supplies of raw materials as a result of Import liberalisation and in the latter part of the year better crop outturn, there was no evidence of recovery from industrial recession for the major part of the year. The recession set in towards the end of 1965 and the rate of growth of industrial output declined from an average of 7 to 8 per cent during the decade 1955—65 to only 2 per cent in 1966 and about one per cent in 1967.

16. For quite some time now, a wide range of industries has been experiencing reces- sionary conditions. The stagnation in public sector outlays on the Plan and the adverse impact of inflationary pressures and shortages on private investment resulted in a reduc- tion in fresh orders for a number of capital goods industries. The spread effects of these cutg were felt over a wide sector. Some relief was provided to recession-affected indus- tries through increase in exports, particularly of the non-traditional items. The increase in exports was, however, not adequate to induce effective utilisation of capacity. Among the consumer goods industries, cotton textiles, which has a sizeable weightage in the index of industrial production, continued to have serious difficulties in the early part of the year both on account of shortage of raw cotton following two consecutive droughts and the lower off-take of cloth consequent upon a fall in real incomes of a large section of the population. The acute shortage of raw materials led to enforced additional holidays for mills. Since September 1967, however, with the improvement in the availability of raw cotton, the industry has resumed normal working. Production figures for the first four months of 1968 indicate a substantial improvement in cotton textile output.

17. There are, however, a few industries which have escaped recessionary trends as their products do not suffer from demand limitation. There is, for instance, a growing demand for power and at the same tune some power projects taken up earlier have fructified. As a result, all industries related to power generation and distribution like electricity, aluminium conductors, electrical goods, electric lamps and power transformers haTe done well. The other industries whose output has steadily grown are the industries where there is considerable scope for import substitution. Nitrogenous fertilizer, petro- leum and petroleum products are in this category. In view of the high level of demand for their products, growth in capacity would largely determine the rate of increase in output The scooter industry, where output has risen, is a case of considerable pent up demand for this type of transport and the limitation here also is productive capacity.

18. Recently, there are signs of a revival in industrial output. The index for J a n u a r y- April 1968 shows a 6.4 per cent increase over the corresponding period last year largely as a result of an increase in output of industries like fertilizers, cotton textiles, tea and vanaspati On the whole, while the industries which had suffered because of insufficiency of raw materials have begun to look up, there are still a number of units in the capital goods producing sector which continue to suffer from a low level of demand.

19 Tn view of the continuing recessionary conditions in Industry, several measure* were taken to promote recovery. The process of liberalisation of the provisions of, licensing for industries, which was initiated in May 1966, was carried forward during the year under review The Government decided in January 968 to dehcense the manufac- ture of agricultural tractors and power tillers; existing units have also been allowed to expand or diversify production without any fresh licence. In December 1967, conditions

for diversification of output involving foreign exchange were relaxed, enabling the indus- tries to iniport raw materials even if it involved additional foreign exchange outlay. In July 1967, price and distribution controls on all categories of. coal (except distribution controls on coking coal required by metallurgical consumers e.g. steel plants) were removed, Price ana distribution controls on all commercial vehicles (3 tonnes and above) and jeeps were also lifted in stages. With effect from May 2, 196S, the decontrolled part of cloth pro- duction by textile mills has been raised from 60 per cent to 75 per cent. Besides, the Government also granted 2 per cent increase in the prices of controlled varieties of cloth, though almost the entire increase would bo absorbed by excise duty adjustments so that the consumers would Mot have to pay a higher price. Price control on all varieties of paper (which was introduced in January 1960) was removed with effect from May 6, 1968. However, controls over the distribution and prices of cement were reimposed with effect from January 1, 1968. Since the capital goods and engineering sectors of the industry were hard hit by the slackening of demand, decision was taken to revive demand by placing advance orders on private firms by the public sector and liberalisation of controls over bank lending against the security of products of engineering industries, Budgetary Operations:

20. The resources position of the Central and State Governments continued to be strained during the fiscal year 1967-68. Reflecling the recessionary trends in the economy budgetary receipts of the Union Government fell sizeably short of expectations under ta* receipts and small savings. In the context of the sleep fall in resources, efforts were made to keep down some outlays. Among other things, the provision in the Union budget for the Annual Plan of 1967-68 was brought down from the budgeted level of Rs, 1826 erorcs to Rs. 1809 crores. Further, the Union Government abolished/reduced the subsidy on the distribution of certain foodgrains. The subsidy on distribution of fertilizers had already been withdrawn during the previous year. Even so, aggregate dis- bursements exceeded budget provisions owing to larger cash outgo on account of en- hancement of dearness allowance for Central Government employees, provision for larger non-Plan grants to States affected by floods, cyclone and earthquake, and larger loans to States and Departmental and other undertakings to meet the shortfall in their internal resources. In the result, in place of the nominal overall surplus of Rs, 1 crore envisaged in the budget for 1967-68, an overall deficit of Rs. 218 crores is now estimated.

21. Resources of Stales were also adversely affected by the recessionary situation in the economy. In particular, resources mobilised by the States from taxes levied by them fell short of budget anticipation by Rs. 5 crores, States, like the Centre, also curtailed the scale of their developmental activity. However, additional expenditure on account of grant of enhanced dearncss allowance to their employees and famine relief added to their burden. As a result, some States resorted to further overdrafts from the Reserve Bank. The Central Government had to step up its special loans to these States to enable them to clear their overdrafts. The total special assistance provided by the Centre in this form amounted to Rs, 118 crores during the fiscal year 1967-68 as compared with Rs. 108 crore.s during 1966-67.

22. In accordance with the revised procedure to deal with the Stales having persistent overdrafts with the Reserve Bank, the Bank issued formal notices to such States on four occasions between M^rch and July 1967. The overdrafts outstanding at the end of March and June 1967 were cleared by the States out. of special loans advanced by the Centre. In view of the abnormal conditions prevailing in the States badly hit by the drought, the Bank refrnmed, for sometime after July 1967. from issuing formil notices 1o Stfte Gov- ernments which were overdrawn. Nevertheless, the Bank kept up pressure on the con- cerned State Governments and the question was reviewed at frequent intervals with the representatives of these States individually. The overdrafts outstanding at the end of March 1968 were reduced with special assistance provided by the Centre._ But the over- drafts again rose sizeably soon after the commencement of the. current fiscal year. The Reserve Bank therefore resumed its earlier procedure of issuing formal notices to the States in default, The position of the States, whose accounts are overdrawn, is being constantly reviewed in Ihe light of this procedure. The overdrafts Vive been cleared at (he end of Tune 1968. In terms of total overdraft over the year July 1967—June 1968 cleared by

23. The budget, of the Union Government for fiscal ye^r 1968-69, presented against the background of an expected revival of the economy, reflects the policy objective of providing through fiscal incentives further stimulus for recovery. Aggregate receipts of the Centre anticipated at Rs. 4703 crores (including the yield from the additional tax measures proposed in the budget) fall short of the budgeted disbursements at. Rs. 4992 crores (including miscellaneous transactions), leaving a sizeable overall deficit of Rs 289 crores. As compared with 1967-68 (revised estimates) both receipts and dis- bursements are placed lower by Rs. 78 crorcs and Rs. 89 crores, respectively, Although

revenue receipts are estimated to exceed the 1967-68 (revised estimates) level by Rs 181 rlZtt n i CI'°reS, U"d er t ax r e v e n l )c a n t¹ Rs- ⁴(" crores under non-tax revenue), the excess wilt be more than offset by the expected shortfall under capital receipts. Net receipts from internal market loans are placed lower than in 1967-68 by Rs 32 crores 1 tie outlook in regard to inflow on account of foreign loan assistance is also not as bright as it was during 1967-68.

24. As regards disbursements, provision for direct disbursements of the Union Govern- ment on both developmental and non-developmental items has been stepped up over the Jevels lor 1967-68 (revised estimates). The provision on the Annual Plan for 1968-69 has been stepped up moderately by Rs. 50 crores to Rs 1859 crores as compared with the outlay of Rs, 1S09 crores on the Annual Plan of 1967-68. In addition, a provision ot Rs. 140 crores has been made for buffer sLocks of foodgrains during 1968-69.

25. The yield from additional taxation proposed by the Union Government for 1963- 69 amounts to Rs, 119 crores including changes in postal and telegraph rates and in railway passenger fares and freights, The Union Budget ' proposals for 1968-69 were designed mainly to promote savings and investment in the economy, to raise agricultural productivity and expand export earnings. Thus, in the field of personal taxation, the Income-tax Annuity Deposit Scheme has been discontinued and provision for taxation of dividend income liberalised, In regard to the corporate sector, apart from abolition of tax on excess distribution of equity dividend and the reduction of the rate of surtax, the Finance Act hns provided, inter alia, for liberal deduction from taxable income of speci- fied categories of expenditure incurred in connection with raising agricultural output and promotion of exports, and for exempting from income tax, the whole income derived by an Indian company by way of royalties, fees, etc., from abroad. The bulk of the addi- tional yield from tax proposals is expected from proposals in regard to excise and import duties. The items chosen for additional/new levies of excise arc cither luxuries or •articles of inessential consumption, or items where it is desirable to restrict domestic consumption in the interest of larger exports. Likewise, items covered by the additional import duties are either luxury items or products where indigenous output has been showing a rising trend.

26 In the case of State Governments, a sizeable improvement in resources is anti- cipated in the current fiscal year. At the same time, States have also stepped up the scale of their outlays on both developmental and non-developmental heads. Consequently, the budgeied overall deficit ot Rs. 99 6 crores (at existing levels of taxation) is only marginally lowc: than the deficit of Rs. 102-2 crores for 1967-68. Including the States share of Rs. 15 crores in Centre's additional mobilisation through its budget proposals, the additional tax proposals made by five States, and the economies in expenditure pro- posed by two States, the overall deficit will be brought down to about Rs. 67 CTOTCS. Ot this Rs 9.5 crores is expected to be covered by net sale of securities in the cash balance investment account. Both for the immediate future and over the longer run additional mobilisation of resources by States is imperative if economic growth is to be fostered.

27. Net resources mobilised by the Centre and States through market borrowings were on a reduced scale during the fiscal year 1967-68 than during the preceding year. This was mainly due to the fact that the amount of maturing loans due for repayment by States was sizeably larger (Rs. 51 crores) than during 1966-67 (Rs. 2 crores). The Union Governmem floi>.i--.I in July 1967 three cash-cum-convcrsion loans, viz., a 5-year 4 1/2 per cent loan 1972, u 15-year 5 per cent loan 1982 and a 25-year 5$ per cent loan 1992 for an aggregate amount of Rs. 350 crores. Subscriptions amounted lo Rs. 350.5 crores, of which Rs. 131.0 crores were in cash and Rs, 219.5 crores in the form of con- version. Net market loans of the Centre, after allowing for cash repayments on account of matured loans, amounted to Rs. 94 crores, the same as expected in the budget but Rs. 14 crores more than the amount realised during 1966-67. The State Governments floated in September 1967 loans for an aggregate amount of Rs. 114.75 crores with yields ranging from 5.87 per cent to 6.11 per cent. Subscriptions to the loans amounted to Rs. 125 crores (including Rs. 7 crores by way of conversion) the whole of which was accepted. Allowing for cash repayments, net market loans of States amounted to Rs. 74 crores during the year as against Rs. 97 crores during 1966-67. Thus, net market loans of the Centre and States worked out to Rs. 168 crores for the fiscal year 1967-68 as compared with Rs. 177 crores during 1966-67.

28, The Union budget for 1968-69 has taken credit for gross market borrowings of Rs. 300 crores. Allowing for repayments of maturing loans, net market loans are esti- mated tit Rs. 61 crores. The Central Government issued on May 11, 1968 the 5i per

cent loan 1995 tit par for an aggregate amount of Rs, 175 crores. Facilities for conver- sion were offered in respect of 3 3/4 per cent National Plan Bonds Fifth Series (3 3/4 per cent loan 1968), Total subscriptions to the loan afigregated Rs. 178.56 crores— Rs. 117-75 crores in conversion and Rs. 60-81 crores in cash. Allowing for cash repay- ments of the matured loan, net receipts from the market loan amounted to Rs. 21.92 crores. The Government announced on July 5, 1968 the issue of another cash-e;/m-con- version loan, namely, 44 per cent loan 1975 for a total amount of Rs. 135 crorcs. The maturing 3 1/2 per cent loan 1968 was offered for conversion at par into the new loan. The subscription list opened on July 26 and closed on the same day. Total sub- scriptions amounted to Rs. 142 crores, of which Rs, 76 crores were in cash and Rs 66 crores were conversions; the entire subscription was accepted. Allowing for cash repay- ment of the unconverted portion of the 3 1/2 per cent loan 1968 and repayment on account of 4 1/4 per cent National Defence Loan, 1968 (Rs, 10.43 crores) and the 4 per cent Hyderabad Development Loan, 1968 (Rs. 2.18 crores) which mature during September-October 1968, the net market borrowing of the Centre for 1968-69 would aggregate Rs. 81 crores (including Rs. 22 crores raised in May referred to above) as against Rs, 61 crores envisaged in the budget for 1968-69

29. The recovery in the gilt-edged market noticed in the preceding year gathered further momentum during the year under review. Open market operations of the Reserve Bank continued to be guided by the objectives of creating orderly market conditions and rationalising the yield pattern by correcting distortions in it. In pursuance of this, the Reserve Bank has, from time to time, made adjustments in its buying and selling ratea. Prices of most scrips have been well maintained and there has been some welcome broadening of activity in the gilt-edged market. The Index of Government and scmi- Govcrnment securities {base : 1961-62—100) rose from 94.7 at end-June 1967 to 96,3 by the week ended March 2, 1968, Consequent on the reduction in the Bank rate on March 2, 1968, prices in the gilt-edged market iirmed up further, the index rising to 98.0 by end- Juni 1968. The Bank has continued to be a net seller of securities in the market

30. Net collections of small savings aggregated Rs. 122 crores during the fiscal year 1967-68. At this level, they showed a shortfall relatively to anticipations in the budget estimates (Rs. 130 crores), although as compared with 1966-67 (Rs. 118 crores) they were somewhat higher. To provide a fillip to the small savings movement, fresh incen- tives were offered during the year, The rates of interest on certain media were stepped up so as to induce investors to hold investment till maturity. However, following tho reduction in the rate of interest offered by commercial banks on savings deposits, the rate on Post Office Savings Bank Deposits was reduced from 4 per cent to 3J per cent, The movement was made more broadbased by the addition of a new instrument viz., the 5- year fixed deposit scheme with (tax free) interest of 5 per cent, payable with the deposit on maturity. Mention may also be made of the institution of a Public Provident Fund Scheme, mainly :for ,thc benefit of self-employed persons who could not contribute to any recognised provittent funds under the Provident fund Act, 1925. Contributions to the Fund will enjoy the same income-tax and wealth tax benefits now granted to contributions to recognised Provident Funds and to savings in the form of insurance premia, Tho scheme has come into operation from July 1, 1968.

31. The general deterioration in the economic situation during the last two years caused a postponement of the implementation of (he Fourth Five-Year Plan which was due to commence in 1966-67. The outlays in the public sector on the "Annual Plans" of 1966-67 and 1967-68 at Rs. 2141 crores and Rs. 2205 crorcs, respectively, fell marginally short of the targets postulated for these years (Rs. 2145 crores and Rs. 2246 crores). For 1968-69, an outlay of Rs 2337 crores (including Rs. 140 crores on account of buffer stock of foodgrains) has been targeted, Tt has been decided to launch the Fourth Five- Year Plan during 1969-70 and the formulation of the Plan is in an advanced stage.

Private Corporate Sector:

32. Although there was improvement in the general economic situation for this year as a whole, there was no clear upward trend in actual investment. The capital issues consents rose sharply but actual capital raised showed only marginal rise and the sanctions as well as the disbursements relating to the assistance by the term lending institutions .actually declined.

33. The consents (including no objection certificates) granted to non-Government public limited companies for the issue of fresh capital through shares and debentures

(excluding bonus and miscellaneous issues) move than doubled from Rs. 67 crores* grant' e

34. There was also a modest revival in the new issue activity during 1967-68 (April- March) and the issue of capital through prospectus was higher as compared with 1966-67 mainly in equity. There was an improvement in the public response to a certain extent as indicated by a fall in the proportion of the amount devolved on the under-writers, though the support from the Institutional investors continued to be substantial. Further, capital (excluding bonus and miscellaneous issues) raised by non-Government companies^ increased from Rs. 72,4 crores in 1966 to Rs, 81.4 crores in 1967. The equity capital raised recorded an increase from Rs, 49.7 crores in 1966 to Rs. 53.0 crores in 1967 and debentures from Rs. 15.3 crores to Rs. 20.9 crores during the samel period.

35, The stock market remained depressed for the greater part of the year July 1967— June 1968 owing, among other factors, to the persistence of supply shortages, and of recessionary conditions in important sectors of industry, accompanied by labour unrest in certain parts of the country However, with the easing of the supply situation following the record level of argicultural production, the fiscal reliefs announced in the Union budget for 1968-69 in February 1968 to the corporate sector and the reduction in the Bank rate from 6 per cent to 5 per cent witrt effect from March 2 favourably influenced the market sentiment. Reflecting the mood of the stock market in these two phases, the Reserve Bank Index of Prices of "Variable Divi- dend Industrial Securities (Base: 1961-62—100) declined steadily from 77,5 on July 1, 1967 to reach a low of 73.2 by mid-February 1968; subsequently, a recovery in share prices set in, raising the Index to 81.0 by the close of the year, although there was a temporary reaction between March 9 and April 13 owing to the pressure on rcserver currencies and the consequent uncertainties in the international financial market. Over the year as a whole, the index recorded a net rise of 4.5 per cent in contrast to the net decline of 4.0 per cent in the preceding year.

36, The financial assistance to the corporate sector provided by the term-lending institutions declined during 1967-68 (April-March) compared with the preceding year, dospite the additional facilities provided during the year for concessional finance. Applications for now assistance also declined. Aggregate financial assistance sanctioned by term-lending institutions! in the form of loans, underwriting and direct subscription to shares and debentures declined steeply from Rs. 122 crores in 1966-67 (April-March) to Rs. 86 crorcs in 1967-68. @ Disbursements were also lower at Rs, 104 crorcs as against RH, 124 crores in the previous year. Loans sanctioned and disbursements made by the Industrial Development Bank of India (I.D.B.T.) showed a sharp fall from Rs, 55 erores and Rs. 43 crores respectively, in the fiscal year 1966-67 to Rs. 27 crores and Rs. 39 crorcs, respectively in 1967-68.

37. The T.D.B.I. introduced additional financial facilities and concessions during the year (referred to in paras 73—76). Apart from theso term-lending institutions, the Unit Trust of India and the Life Insurance Corporation of India continued to assist the private corporate sector through their underwriting and investment operations. The Tiff. Insurance Corporation's investments in shares and debentures at Rs. 193 crorcs at the end of March 1967 were higher by Rs. 10 crores than their level at the end of the correspondine month in 1966. The increase in investments by the Unit Trust of India amounted to Rs. 15 crorcar between end-May 1967 and end-May 1968 as compared with Rs. 6 crores in the corresponding period of 1966-67. Under the Credit Guarantee Scheme which was expanded during the year and the new schemes introduced by the State Bank of India, there was a substantial increase in the scale of assistance provided to small-scale industries. The Reserve Bank of India liberalised the terms of financinc of the increase in advances

•Excluding private limited companies banking and insurance companies and provident societies incorporated as companies. Since November 4, T9fi6 these com- panies have been exempted from the operation of Capital Issues Control altogether and they no longer require the prior sanction of the Controller of Capital Issues, while Issuing capital, except in case of bonus issues; hence they arc not covered In the data for both years.

tThe institutions included are the IDBT IFC, ICICT, SFCS and SIDCS:

@ Figures for 1967-68 are preliminary.

inadc by the commercial banks to Hie small-stale industries. The I,D.B.I, took comple- mentary measures in Ihe sphere of term-finance by providing refinance at a concessional rate to the bants and the State Financial Corporations in respect of their loans covered under the Credit Guarantee Scheme.

38. In the taullion market, the ban on forward trading in gold and silver imposed with jeffect from November 14, 1962 and January 10, 1963, respectively, continued during the your under review. In spot trading in the Bombay market, silver was in the limelight and showed a persistent uptrend in prices owing to an unprecedented demand in the context of the world uptrend in silver prices following tlic decision of the U.S. Treasury to abandon the monetary price of $ 1.29 psr fme ounce and to restrict sales to domestic industrial users at going market price. The rise in silver prices was very steep from Rs. 353'00 to Rs. 524.00 per kg Gold, on the other hand, presented a steady front and remained by and iarge unaffected by .the 'gold rush' in Europe in March 1968 and by tho general uptrend in world prices of the metal following the decision of the European central bankers on 3 two-tier price system for gold. In fact, the rise in the price of standard fiold vvas modest at Rs. 4.00 per 10 grams from Rs. 157.50 on July 7, 1967 to Rs. 161.50 on June 30, 1968.

Money, Credit and Credit Policy:

39. Reflecting the higher level of economic activity during the year July 1967—Juno 1968, money supply with the public rose substantially by Rs. 503 crorcs (or by 10.1 per cent) as compared with Rs. 312 crorcs (or 6,7 per cent) in the previous year. The in- crease in the currency component, and in deposit money, was more or less the same, the former having men by Rs. 248 crores (Rs, 166 crorcs in the preceding year) and the latter by Rs, 255 crores (Rs. 146 crores in 1966-67), Total monetary resources comprising currency with the public and aggregate deposits of banks expanded during the year by Rs. 764 crores (11.0 per cent) as compared with Rs. 529 crorcs (8.3 per cent) in 1966-67. The rate of monetary expansion was only slightly higher than the growth rate in real output. Larger credit extension by banks to the private sector was mainly responsible for the increased rate of expansion in money supply. Partly as a result of relaxation of credit policy, net bank credit to tho private sector recorded a substantial increase of 26.8 per cent during the year as against 18.5 per cent in the previous year. At Rs. 298 crores the increase was 71 per cent higher than that of the previous year. While the increase in net bank credit to the private sector including credit for food procurement operations was appreciably higher than in the preceding year that to the Government sector (at Rs. 171 crores) was about the same as in the previous year. The Reserve Bank's net credit to Government showed a smaller rise of Rs. 113 crores as against Rs. 182 crores in the previous year; other banks' credit to Government sector, however, fncreased by Rs, 58 crores in contrast to a contraction of Rs, 10 crores in the preceding year. An improvement to the extent of Rs. 95 crores in net foreign exchange assets of banks as against a fall of Rs. 24 crorcs in the previous year represented a significant expansionary impact on money supply. The marked increase in net foreign exchange assets during the year is attributable, to net drawings from the IMF, deposits of I.B.R.D. with the Reserve Bank and an improvement in export earnings along with a noticeable decline in payments for imports. The expansionary effect of the above factors on money supply was offset to some extent by an increase of Rs. 60 crores in net non-mone- tary liabilities of the banking system (Rs. 32 crores in the previous year). During the 1967 slack season (May-October) money supply showed a smaller contraction of Rs. 63 crores which was only half of that witnessed in the previous slack season. In the 1967-68 busy reason which commenced against the background of a large increase in agricultural output, money supply recorded the largest ever expansion of Rs. 545 crores (Rs, 456 crores in the preceding busy season), mainly on account of larger credit extension to private sector.

40 The credit situation during the year was marked by a much faster pace of credit expansion than last year accompanied by only a moderately higher rato of deposit accrual which resulted in a steep rise in the credit-deposit ratio from 74.8 per cent to 78.2 per cent. Credit expansion of the order of Rs. 458 crores (17 per cent) was larger by Rs. 121 crores than in the preceding year (Rs. 337 crores or 15 per cent) but trie rise in deposits at Rs. 435 crores (12 per cent) was larger by only Rs. 67 crorcs as compared with the deposit accrual in 1966-67 (11 per cent). The banks, therefore, had a greater recourse to borrowings from the Reserve Bank during the year (Rs. 92 crores as against Its. 11 crorcs in tho previous year).

41, In the past few years, the accent of monetary policy primarily was on keeping a restraint on the growing inflationary pressures in the economy by minimising the extent and duration of the Reserve Bank's lending to commercial banks. T^i the opsration of •this policy, however, the Bank look caro to see (hat thd impact of restrictive credit measures was wherever necessary, softened by a selective liberalisation of credit for productive and

developmental activities in the economy. Since August-September 1967 there has been a shift of emphasis towards helping the revival oft industrial production, particularly in. industries facing recessionary conditions and stimulating the How of credit to priority sectors like agriculture, small industries and exports. With the bumper harvest of 1967-68, and the fall in wholesale prices, the accent on liberalisation became more pronounced.

42. In the slack season of 1967, credit policy had to be geared initially to reckon. with the sustained pressure on prices, particularly of agricultural commodities and a little later, to provide for a larger credit flow to selected industrial sectors which were facing recessionary tendencies, At the beginning of the slack season, therefore, the banks- were asked to secure & sizeable reduction in advances against seasonal commodities and sjtfto to exercise a striqt control over advances against commodities in short supply and unsecured advances. In view of the likely slower pace of deposit expansion in the slack season, the banks were also advised to make positive efforts at deposit mobilisation. Utilising the proceeds tor investments in Government securities. At the end of luly 1967, the Reserve Bank urged banks to enlarge their assistance to agriculture, exports, small- scale industries and engineering industries. With a view to stimulating the How of bank, credit to these sectors, the Reserve flank, in a circular letter to banks on August 9, 1967. annonnced a package of liberalising measures. Refinance from the Bank was made available at a preferential rate of 4-£ per cent in respect of scheduled commercial banks'" packing credit advances to exporters of engineering and metallurgical products and at Bank rate in respect of packing credits to exporters of other products as also in respect of post-shipment export bills in all currencies. Simultaneously ceilings were prescribed for the rates to be changed by banks to the ultimate borrowers at 6 per cent in respect ot packing credit advances to exporters of engineering and metallurgical products and at 8 per cent in respect of other packing credit and post-shipment finance; for rupee usance export bills a ceiling rate of 7.5 per cent was already operative. These ceilings applied, irrespective of the banks' resort to Reserve Bank refinance. In line with this policy the (.D.BI, also liberalised in August and September 1967 the scope of its schemes for refi- nancing medium-term export credit and rediscounting of bills promissory notes arising out Of sales of indigenous machinery on deferred payment basis. To mitigate the impact of advances to priority sectors on the net liquidity ratio of banks as also the impact of Ceiling rates on banks' earnings the Reserve Bank advised that the increase in a bank't advances to all priority-sectors over the average of such advances during July to October 1966 for the slack season and November 1966 to April 1967 for the busy season, would be treated as part of liquid assets of banks while computing the net liquidity ratio. Selective controls on bank advances were continued in respect of advances against com- modities in short supply such as foodgrains, oilseeds, vegetable oils, sugar and cotton and' kapas.

43. During the slack season of 1967, the overall resources position of scheduled com- mercial banks was much less comfortable than in the preceding slick season, as reflected ia a smaller growth in deposits;—Rs. 191 crores as compared with Rs. 265 crorcs in the pre- vious slack season. In the result, despite the larger credit contraction of Rs. 102 crore* as compared with Rs, 86 crores in the 1966 slack season, the credit-deposit ratio at the- close of the slack season was 2.2 percentage points higher than that a year ago. Owing to the slower deposit growth, higher increase in cash reserves and larscr repayment of loans to the Reserve Bank, the net increase in banks' investments in Government securi- ties during the 1967 slack season was lower at Rs. 218 crores as compared with Rs. 29ft crores during tho 1966 slack season, The net liquidity ratio of scheduled commercial banks was, therefore, lower at 37.4 per cent as compared with 39.3 per cent at the end of tho 1966 slack season.

44. Credit policy for the 1967-68 busy season took into account the higher demand for bank credit emanating from the expected increase in agricultural output, the conse- quent increase in official procurement operations in foodgrains as well as increased re- liance by State Governments on the banking system for financing storage and distribution of chemical fertilizers, and the need to stimulate industrial output. It was also visualised that as the deposit growth during the year was expected to be lower than in the previous year, the Reserve Bank would be called upon to provide a larger quantum of refinance to banks. At the same time, however, the Bank was to provide refinance-, on a more selective basis, since the prevailing price situation did not permit a general expansion of credit While the basic policy of the Bank to rrn*kc refinance available to bunks at the Bank rate, so long as a bank's net liquidity ratio was above 30 per cent remained unchanged, the Bank continued the various special schemes of refinance under which banks could borrow at Bank rate or below and extended the scope of such refinance facilities to cover additional purposes. The Governor announced in February 1968 the Bank's decision to charge a concessional rate of 4.5 per cent to scheduled commercial banks in respect of

their borrowing equivalent to the increase in advauces made by them to the priority sector* over the average of such advances in the slack or the busy season, as the case may be. The refinance at Bank rate or at a rate lower than the Bank rate under the various special schemes was to be additional to what a bank was entitled to obtain on the basis ol⁷ the excess of its net liquidity ratio over 30 per cent. The Bank extended the scope of refinance at the Bank rate to cover specific purposes, which included advances to State Governments/their agencies/Food Corporation of India for the purpose of food procure- ment operations and advances for financing the distribution of chemical fertilizers and pesticides. Again, refinance for these purposes was made available in the same manner as under the Bill Market Scheme, facilities in respect ol: which were reintroduced from November 1, 1967.

45. In the operation of credit policy, the Reserve Bank also provided for an extension of refinance facilities on a discretionary basis, for limited periods, in certain special cases so that the pacp of productive activity was not impeded for lack of credit. Banks were advised to bring to the notice of the Reserve Bank cases where they could not sanction loans to agricultural borrowers and to manufacturing units owing to paucity of resources. The system of higher interest rates applicable in respect of borrowings from tho Bank above the Bank rale entitlement was also liberalised. In regard to export credit, the Bank, besides continuing the refinance schemes introduced in August 1967, further reduced the cost of export credit by reducing in lanuary 1968 the ceiling rate from 8 to 7.5 per cent in respect of packing credit for products other than engineering and metallurgical ones und all postshipment bills excepting rupee usance export bills for which a ceiling of 7-5 per cent was already operative and which was subsequently reduced to 6 per cent in March, As this rate was much lower than what the banks chapel Cor domestic credit, a scheme has been evolved for grant of subsidy towards interest charges on export finance provided by banks at 6 per cent. Under the scheme, which became effective from March 3, 1968, the rate of subsidy would be one and a half per CCP*

46. In conformity with the policy to provide banks with additional flexibility of operations in extending unsecured credit for production, trade and exports, the Bank consequent upon its acceptance of the major recommendations of the Working Group on Unsecured Advances and Guarantees decided that several specified categories of advances, hitherto classified as unsecured advances, would be excluded, inter aha, from the total of unsecured advances for tho purpose of credit policy.

47. As the busy season progressed, prices began to decline at a fairly fast rate. Tho pace of bank credit expansion was considerably slower than expected and what was even more significant, important sections of industry continued to experience recessionary conditions. In the busy season, unto the end of February 1968, credit expanded at a slower pace (Rs. 306 crores) than in the corresponding period last yenr (Rs. 319 crores) in spite of a higher rate of deposit accrual (Rs. 143 crores as against Rs. 77 crorca). More significantly, credit expansion for purposes other than food procurement operations was ever lower at Rs- 248 crores as against Rs. 323 crores, ll was clear, therefore, that urgent action was needed. Some fiscal measures to stimulate the recovery of the economy wero announced in the budget for 1968-69. The Bank reduced the Bank rate from 6 per cent to 5 per cent with effect from March 2, 1968. Simultaneously the Bank announced (i) a downward adjustment in the structure of selected interest rates to be paid by banks on deposits and the maximum rate to be charged by banks on their advances was also reduced from 10 per cent to 9.50 per cent per annum, (ii) a ceiling of 6 per cent per annum for packing credit and post-shipment credit for exports, and (iii) a reduction by half a per cent to 3 per cent per annum in the rate for 91-day Treasury bills. Accordingly, short-term interest rates were adjusted downwards.

4R. By tho end of March 1968. bank credit was running ahead of the last season's corresponding level and by the end of April the total seasonal expansion came to be Rs. 508 crores as against Rs. 426 crores in the 1966-67 busy season. Excluding advances by the State Bank of India and its subsidiaries for food procurement operations, the busy season expansion of bank credit was Rs. 401 crores as against Rs, 417 crores in the preceding season, Bank advances against all seasonal commodities rose by Rs. 384 crores during 1967-68 busy season as against Rs. 171 crores during the 1966-67 busy season, but advances against securities other than seasonal showed a much smaller expansion (Rs. 113 crores as against Rs. 260 crores). Deposit growth, however, continued to be higher throughout the season, amounting to Rs. 220 crores as against Rs. 169 crores duriue the previous busv season. The higher volume of credit durlnq; the busy season was financed by banks mainly by drawing down their investments and by recourse to borrowing from the Bank which was larger mainly because of the liberalised refinance facilities made available by the Bank. Liquidation of investment in Gr^rnment securities amounted to Rs. 182 crores (Rs. 198 crores In the preceding year) and borrowing from the Reserve Bank wa" larger by Rs. 105 CTorea as compared with Rs. 41 crores In the 1966-67 busy season.

At their peak, borrowings from the Bank in the 1967-68 season touched Rs 148 crores on May 10, 1968 as against Rs. 140 crores reached on March 31, 1967. The'comfortable resources position of bunks was reflected in easy money conditions in the inter-bank coll money market relative to the previous busy season. In Bombay, the highest rato for the 1967-68 season was reached at 5.3 per cent, in the middle of December 1967 and in Calcutta at 5,5 per cent, in the third week of March 1968.

49. In the field of selective credit eonirols, the Bank gradually relaxed controls on advances against some of the seasonal commodities. The credit by commercial and co-operative banks against gur was, however, brought under the purview of selective controls lor tho first time, owing to the sharp rise in iis price. With a view to encouraging production and export of oilcakes, advances against oils and oilseeds to solvent extraction plants and/or the integral oil expcller mills with solvent extraction plants were exempted from ceiling relictions while a preferential margin of 25 per cent, was fixed in respect of such advances. Later, further relaxation was introduced in respect of advances against groundnut and vegetable oils, following (he arrival of a larger groundnut crop in 1967-68. Preferential concessions both in respect of ceilings and margins were accorded in respect of credit to vanaspati manufacturers and oil millers and that against warehouse receipts. In view of the prospects of a betlcr supply situation of cotton and in order to take account of the regional disparities in cotton marketing as well as the delayed onset of the marketing season, the Bank re-lixcd the ceilings and margins on banks' advances against cotton and kapas on a more flexible basis, banks being given the option lo choose the base period from either Hie corresponding month oil tho previous year or the month immediately following that month. The ceilings were fixed at 85 per cent of the base month and margins at 25 per cent, on advances to mills and 35 per cent for others. Credit ceilings and margins were also modified in November 1967 in respect of credit advanced by State and Central Co-operative Banks against cotton. The margin on advances to co-operative cotton mills was lowered in December 1967. The Bank further relaxed the control on commercial banks' advances effective April 2, 1968. The ceiling was made more broad-based and raised to 110 per cent, of the peak level during the corresponding three-month period in 1967 commencing with April—June 1967 or the prevailing ceiling together with additional limits granted, whichever was higher. The margin for trade advances was lowered and a uniform margin of 25 per cent, was thus prescribed for all parties in April 1968. In June J968, the minimum margin was reduced lo 20 per cent, in the case of cotton mills. Control on co-operative banks' advances against cotton was also relaxed towards the end of April 1968 when ceilings in respect of such advances were raised in the case of State and Central Co-operative Banks. Thus the Bank's policy during the year Wits generally to relax selective credit controls whenever the situation of price and availability of individual commodities warranted it

50. To assist the food procurement operations the Bank decided on June 15, 1968 that although the limits sanctioned by it under the regular Bill Market Scheme for tho 1967-68 season would lapse by tho close of Juno 1968, the refinance facilities under the Bill Market Scheme in respect of advances made by banks for the purpose of foodgrains procuremenl/distribution/storage to the State Governments/their agencies/Food Corpora- tion of India would be available upto the end of September 1968.

51. During the first two months of the current slack season (i.e. upto June 28, 1968), there was a contra-seasonal credit expwwlon of Rs. 15 crores as against, a contraction of Rs. 39 crores in the corresponding period of 1967, but deposit accrual was larger at Rs. 78 crores as compared with Rs. 54 crores. On present indications, it appears that seasonal contraction in credit would be somewhat smaller but the deposit growth would be larger. In respect of selective credit controls, in view of the improved supply position in respect of 'other foodgrains' (i.e. other than paddy and rice and wheat), oilseeds and vegetable oils and a fall in their prices, the Bank, on May 27, 1968, relaxed its control on advances against these commodities. A similar relaxation was also made in respect of advances .against wheat in August 1968.

52. A major development relating to the banking system this year was tho initiation by tho Government of a number of measures in pursuance of its policy of social control "->ver banks The primary objective of this new policy is to secure a better alignment of (he commercial banking system to the emerging needs of the economy. While there have been striking advances i-n recent years in the geographical as well as functional coverage of commercial banking, largo sectors of the economy like agriculture and small-scale industry have not come within its purview. It has been felt increasingly that the time has come for a more active and positive role by the commercial banks in co-operation with the co-operative banks to make their services available In these new and important fleWs^ The programmes of branch expansion have made considerable headway, but more effort in the same direction is called for. The essential idea behind the scheme of social control or banks is that a co-ordinated view of the requirements of tho entire economy,

which is being rapidly modernised, be taken and concerted measures put through more purposive distribution of available credit and for more effective mobilisaiio.. savings. The changes proposed at the decision-making levels in the commercial bannd through appropriate legislative amendments arc designed to facilitate this orientation. .For a periodical assessment of the emerging needs and for working out the appropriate guidelines for banks' lending policies in accordance with an agreed overall scheme of priorities, a new body called the National Credit Council has been set up. The Council is presided over by the Depuly Prime Minister and Minister of Finance. The Governor of the Reserve Bank is its Vice-Chairman. Its membership comprises representatives of industry (large scale, medium scale and small), trade (including export trade), agriculture, commercial banking, co-operative sector and professional groups including economists. Over Ihe years, the Reserve Bank has played a signticant role in building up and strengthening the structure of term financing institutions. Its (ask in the new sel-up will be to carry the process of further extending the organised bankiny system by taking a co-ordinated view of the requirements and availability of short-term, medium-term and long-lcrm finance for the entire economy.

53. The National Credit Council has already met twice (in March and July 1968) .and has set guide-posts for bank lending. Even before the legislative amendments arc passed the major commercial banks have taken action to appoint full time Chairmen and reconstitute their Boards of Directors in consonance with the objectives of social control. The foreign banks have also taken steps to set up Advisory Boards with similar intent For considering the long-term rcorientation and development of the banking structure, the Government have decided to set up a Banking Commission.

Balance of Payments:

54. On external account, there was a sizeablo addition of U 104 million to the foreign •exchange reserves during the year. July 1967—June 1968 in contrast with the sharp drop of ¥ 160 million in the year before. As much as $ 78 million of the year's growth in reserves was due to the net drawing of $ 32 million from the I.M.F. and special deposits of $46 million by the I.B.R.D. The net drawing from the Fund was the combined result of a drawing of $ 90 million in December 1967 under the compensatory scheme for financing fluctuations in export earnings and a repayment of $ 58 million in March 1968 on earlier drawings. Last year, there was a repayment of ?58 million to the I.M.F. Exclusive of these transactions and depreciation of sterling assets following the devaluation of the pound, the rise in reserves this year works out to $ 40 million as compared with a drawing down of $ 102 million last year.

55. The improvement in reserves this year reflects the sizeable reduction in food and raw jute imports financed from free foreign exchange resources, the better performance of exports and larger utilisation of foreign aid, particularly non-project assistance. Several factors account for the increase in exports : larger domestic availabilities, the recessionary, situation in the domestic market, the beneficial effect of the various promotional measures adopted by Government and the increasing efforts made by industrialists and businessmen k> build up adequate contacts abroad. The reduction in the outlay on maintenance imports, mainly industrial inputs, was facilitated by the larger availability of non-project assistance as well as import substitution stimulated by the rise in the rupee costs of imports following the devaluation of the rupee. Debt service payments continued to rise, but the net outgo on this account was mitigated by the refinancing credit extended by the U,K, and.the re-scheduling of debt by some members of the Aid-India Consortium, jn addition to the special deposits by the I.B.R.D., referred to earlier.

56. Exports according to the data compiled by the DGCIS totalled $ 1,598 million in the financial year 1967-68, 3-6 per cent higher than in the preceding year, but still 5.6 per cent, lower than in 1965-66. The recovery commenced in October 1967 and has continued through April—June 1968. Exports during the nine-month period (October 1967—June 1968) were 6 per cent, higher than in the corresponding period of 1966-67 and were also a little above the level in 1965-66. The increase during the financial year 1967-68, though small, marked a reversal of the declining trend of the post-devaluation period and was particularly significant in that it occurred despite some weakening of import demand by the major industrial countries, and the loss in the rupee value of India's exports as a rcsuJt of the devaluation of sterling.

57. About three-fourths of the rise in exports in the financial year 1967-68 was brought about by non-traditional items of exports, such as iron and steel, engineering goods and marino products. Iron and steel recorded a spectacular rise of 122 per cent, to $73 milion; engineering goods also rose by 33 per cent to 155-1 million. Among the traditional lines, tea and unmanufactured tobacco recorded sizeable increases while cotton textiles exports increased marginally. Exports of unmanufactured tobacco went up by 62 per cent, to 3 46.5 million largely because of higher domestic production. Tea exports,

" " .^ a e °od oomesac crop and lower production in Ceylon, increased by 14 per cent to f 240-3 million, wh.ch was about the level at which they were in 1965-66 Apart from tea, where there was also a rise in unit values, the export growth in most items reflected an. increase in quantum^ Largely attributable to the intensified c o m p e te from Pakista? was the drop of 4 20.6 million or 6 per cent, to $311.4 million in the exports of juto manufactures There was a sharp fall of 26 per cent, in sacking and a small one of t per cent in hessmn; carpet backing, however, improved by 8 per cent. Leather and leather manufactures declined by 14 per cent, to $71.3 million and hides and skins by a sharp 54- per cent, to ? 10.1 million mainly due to the reduced offtake by the UK. Both the unit values and the quantities recorded lower levels. Exports of cashew kernels declined by 6 per cent, to Ti 57.4 million reflecting the fall in unit values.

58. Also according to DGCIS data, imports during the financial year 1967-68 totalled 5 2,632 million, 5 per cent, and 11 per cent, lower than in 1966-67 and 1965-66 respectively. There were sharp declines in the imports of food and raw juto due to better domestic output. Excluding these, imports during 1967-68 amounted to I 1,935 million, 5.9 per cent, higher lhan in 1966-67 hut still 14.6 per cent, lower as compared with 1965-66. Apart from raw cotton, the imports of which went up by 48 per cent, to $ 111 million, because of two successive poor domestic crops, the increaso in imports in 1967-68 was accounted' for by industrial inputs. This increase reflected by liberalisation of the imports policy for the year and some picking up of tho rate of growth in industrial production in the last few months of the year. The rise in imports was, however, lower than might have been expected, the main factor in the situation being the continued low level of investment and the persistence of recessionary conditions in the economy.

59. With limited availabilities of free foreign exchange resources, total imports have moved generally with the level of foreign assistance received. The amount of aid! utilised during the financial year 1967-68 is estimated to be $ 1,594 million. Tt was ? 88 million higher than in the preceding year, $ 24 million lower than in 1965-66. The increase; in utilisation over the year came from the aid already available in the pipeline. In fact, authorisations of external assistance, which picked up substantially in 1966-67 in support of a liberal import polity following the devaluation of the rupee, showed a sharp decline of about 55 per cent, to $ 948 million in 1967-68. The i.D.A. did not provide any fresh did during 1967-68 pending replenishment of its funds and there was also a delay in tlic authorisations of non-project assistance by the U.S.A. against its. commitments for 1967-6S. At the same time, debt service payments (both interest and amortisation) which had progressively increased over tho last several years from 5 214 million in 1961-62 to $318 million in 1966-67 rose further to $431 million in 1967-68. Consequently, the net inflow of foreign aid which increased from $497 million in 1961-62 to $1,355 million by 1965-66 fell to $1,188 million in 1966-67 and to $1,163 million in 1967-68.

60. With the more favourable trends in the economy—given s good monsoon thift year—exports should show a further rise during 1968-69. Imports of industrial inputs and capital goods arc ulso likely to go up. While some improvement In the balance on- commodity trade could be hoped for, debt serving poses a really difficult problem. The Aid-India Consortium at its mreling held in May 1968 recommended assistance of 11.45 billion comprising of 1900 million of non-project aid, $ 100 imlllion of debt relief and $450 million of project aid to meet the requirements for the year 1968-69, but io pursuance of these, indications have been given only to the extent of $ 297 million. Fresh assistance from the I.D.A. depends upon the replenishment of its funds, and the budgetary provision for aid by the U.S. is being drastically cut. The foreign exchange situation will, in this context, call for continued vigilance and flexibility.

Assf-i.iment and Prospects: . ,

61 As the paragraphs above have indicated, the Indian economy is currently in the Process of adjustment to u better balance after a prolonged period °f stresses and strains The price level now is 6 per cent, lower than the level at the end of the last year 'the Glance of payments has shown an improvement; the capital market is to somewhat better shape' and, there is more confidence all-round. This welcome change . T e S o m ic climate." and in expectations augurs well for the much needed resumption of economic growth. But unquestionably many difficult problems lie ahead.

efforts to raise agricultural productivity and a policy of building up and using buffer stocks to counteract fluctuations in output, the outlook for satisfactory growth in that, sector can reasonably be assessed as good.

63. Industrial production has yet to pick up momentum. The rise- of more than 6' per cent, in the Index for January—April, 1968 is encouraging. The recovery from recessionary trends is, however, partial and tardy, and several industries arc working below capacity. Better performances in this sector depends upon a number of factors: a steady rise in real incomes, a. step-up in investment in the public and private sectors,, adequate availability of raw materials, components and spares, domestically and from imports and a further growth in exports.

64. It is but appropriate in this context trlat the stress in the "Approach" document! on the Fourth Plan is on growth with stability. As experience has shown, both these objectives are interrelated; they need equal emphasis and have to be pursued simultaneously. Clearly, no further general increases in prices and costs can be permitted; the need, jni fact, is to improve productivity and to allow a part of the gains in productivity to accrue- to the consumer by way of reduced price and/or, improved quality of output and service. Special effort is needed in this context to prevent the emergence of wage-cost-push, and through it an accentuation of inflationary pressures. Basically, the resumption of growths wtih stability—depends vitally upon the success both of public authorities and of private investors in mobilising larger savings, which necessarily involves restraint on the competing¹ and sometimes even compulsive claims of the different sectors for a large share for themselves for current consumption.

65. While considering the prospects ahead, it is essential first to stress that the return to a position of balance in the economy is as yet not complete. While the index of wholesale prices has come down, the cost of living indices have not yet registered any fall. Pressures for higher wages and dearness allowances persist in several sectors. The increase in. national income in 1967-68, substantial and highly welcome as it is, has still to be viewed against the low levels of income over the previous years. The annual average rate of growth in the past three years works out to only about 2 per cent. Also, the improvement in national income has been the result almost entirely ol! the increase in agricultural production. Industrial production has a long way to go before it resumes its earlier—and highly essential—role as the leading growth sector in the economy. On the employment front, there is little, if any, overall advance, and, although a quantitative measure is difficult, there has been some increase in unemployment. The employment opportunities for the rapidly increasing numbers of the educated labour force are lagging far behind requirements. Continued stagnation in investment in the Indian context cannot but mean failure to utilise some of the highly trained and skilled manpower at the disposal of the community.

66. Art acceleration of the growth process consistently with the maintenance of price stability depends on, a progressive step-up in the rate of domestic savings. For this latter to materialise, simultaneous efforts to increase total output and to strengthen the incentives and the facilities to save and invest are essential, fiscal and monetary policies have a crucial role in bringing this about, and the problem of resource mobilisation for the Fourth Plan has to be viewed in this context. The existence of unutilised capacity in the industrial sector oflers scope for an increase in output without immediate additions to fixed capital investment. Nevertheless, progressive growth in output and incomes cannot be achieved without a steady step-up in investment. This, in turn, requires that as output and incomes increase, the fullest effort to mobilise savings from sectors hitherto insufficiently tapped will be needed. Greater attention is needed, at the same time, to the securing of adequate surpluses from the investments already made and from those coming into fruition from year to year. In essence, the Investment process has to become self-reinforcing.

67. Both for mobilisation of additional resources and for allocating invcstible funds among the different sectors more efficiently, certain adjustments in the working of banking and financial institutions are necessary. Tn this context, reorientation of the banking structure, commensurately with the emerging new needs of agriculture and small-scale industries has recently been initiated. This, and the channelling of credit in terms of a scheme of overall priorities in the light of the deliberations of the National Credit Council, open up far-reaching possibilities for the commercial and co-operative banks both for promoting a more broad-based development process and for mobilising savings on a greatly enlarged scale.

68. Currently, investment In the economy is around 11 per cent, of national income. Domestic savings come to about 8 per cent. The balance of 3 per cent, is covered by net use of external resources. A problem of special concern from the point of view of even maintaining the current level of investment in the economy Is the large and growing:

volume of debt service payments abroad due in Ihc coming years. These liabilities will total the equivalent of about $ 3000 million over the next five years. Judging from recent experience, and on the basis of continuing effort in the same direction, export • earnings can be expected to go up steadily. The- progress of import substitution should result in sizeable import savings. Yet, import needs cannot but grow as the economy develops. On balance, therefore, there is little prospect of the current receipts on the balance of payments making a significant contribution towards these debt service liabilities. This means that total external assistance (gross) would have to rise substantially if even the current net levels of assistance arc to be maintained. If, as is hoped, the agricultural sector keeps up its momentum, it should be possible before long to eliminate food aid. Project aid to supply complsic equipment or plant will have diminishing significance in the coming years, as sizeable domestic capacity for producing a variety of machinery, equipment and capital goods has been built up in the country. There will still be need over the next lew years for external aid towards setting up new projects. The point essentially is that the bulk of external assistance required will have to be in the form of non-project aid; such aid, it must be stressed, is no less a contribution to the country's investment programme than project aid.

69. Whether external assistance on an adequate scale and in. the form and on terms that accord with the requirements of tile economy will bo forthcoming it is hard to say. The external climate in this regard is often as unpredictable as the course of tho Indian monsoon. It is, however, fair to say that the prospects at this stage are by no means reassuring. While the levels of investment will have to be raised to a larger percentage of national income than in recent years, net external assistance as a proportion of investment is certain to fall even on the assumption of generous external assistance. The optimum level of investment for the Fourth Plan will thus have to be determined on a careful assessment of the additional savings effort that is feasible. If so, as is possible, there is a serious shortfall in external assistance, adjustments not only in current .policies but also in the scale and structure of the Fourth Plan might become unavoidable. In any ovent, the need for a maximum effort on domestic savings and on exports and for flexibility in the phasing of Plan outlays will be paramount.

II. DEVELOPMENTS IN INDUSTRIAL FINANCE AND COMMERCIAL BANKING

70. The developments in the Indian economy, set out in the preceding paragraphs, were broadly reflected in the operations of term lending institutions which slowed down during the year. In the sphere of commercial banking, besides tho significant steps initiated by the Government for bringing the banking system under social control, efforts were continued to consolidate and strengthen the banking structure through voluntary merger and compulsory amalgamation and through annual inspection and supervision. The progress made in the branch expansion programmes of the State Bank of Inditi and its subsidiaries, as also of the commercial banks, was impressive.

Industrial Finance: Industrial Development Bank of India and other Term-lending Institu-

tion:

71. The climate for new industrial investment appeared to have been depressed for the greater part of the year by tho recessionary conditions in certain sectors of industry, the uncertainty attending the final shape of the Fourth Plan, the general labour situation and the political uncertainty in certain areas. It was against this background that the Industrial Development Bank of India adopted several specific policy measures during the course of the, year to revive industrial activity. Thus, the emphasis of IDBI's policy was shifted to enlarging its assistance over a wider sector of industry and on a more liberal scale. The Bank also lowered its refinance and rediscounting rates and reduced the •minimum limits in respect of refinance and rediscount facilities, thereby making them available to a larger segment of small borrowers /purchasers.

72. While these measures, however, will take some time to achieve the desired impact the tempo of operations of the IDBI slackened during the year, with the exception of rediscount assistance. New issues on the capital market (equity and preference shares, and debentures) which are also indicative of investment activity were, however, higher than in 1966-67, but these represented implementation of investment decisions taken earlier. Tho financing agencies (other fhan term lending institutions) such as investment houses, bsokers, banks and the Unit Trust of India also extended a larger measure of support to the new issues than in the previous year. Consequently, the number of applications received for loans and underwriting and tho amounts sought from the IDBI recorded declines, leading in turn to a fall in the assistance sanctioned. Thus, the Banks' total sanctions (excluding guarantees) during the year aggregated Rs. 43.81 crores as compared with Rs. 64,00 crores in the previous year. Total disbursements were also IOWET -at Rs 44 71 crores as against Rs. 59.29 crores. The Bank's total assistance outstanding as on June 30, 1968 amounted to Rs. 166.00 crores as against Rs. 144.3 crores as on June 30, 1967. The decline in the assistance would have been more, had it not been

for IDBI's acceptance, in (he matter of direct assistance, of overall responsibility for financing the entire requirements of deserving projects, at an early stage, without waiting, for the detailed settlement of shares of assistance of other participating institutions, to enable the entrepreneurs to proceed with the projects.

73. The policy measures taken by the 1DBI may now be given in some detail. During the year, the 1DBI reduced its rate of interest on refinance of industrial loans successively. Effective July 1, 1967, a concessional rate of 6 per cent was charged, provided the lending institutions did not charge a rate exceeding 8i per cent, per annum:: in other instances, the normal rate continued to be 61 per cent. In March 1968, following the reduction in the Bank rate from 6 per cent, to 5 per cent, the TDBl's normal refinancing rate was reduced from 6b per cent, to 6 per cent, effective March 14, 1968, while the concessional rate of 6 per cent, was reduced to 5i per cent, provided the lending bank or financial institution did not itself charge a rale exceeding 8J per cent, per annum. In addition, in order to channel a larger flow of funds to small industries, the IDBT introduced a special concessional rate of 4} per cent, on refinance of loans to small scale units covered under the Credit Guarantee Scheme of the Central Government, provided the rate to the final borrower was not more than 8 per cent, per annum. The [DBI also reduced the minimum amount of loans to this priority sector from Rs. 1 lakh- to Rs. 0,2 lakh and that in other cases from Rs. 5 lakhs to Rs. 2 lakhs. Simultaneously, the refinance in respect of loans to small industries was raised from 80 per cent to 100' per cent, while in respect of other loans refinance of 100 per cent, was given on loans upto Rs. 5 lakhs. As a measure of relief to the cotton textile industry, effective May 10, 1968, the TDBI has temporarily allowed availment of refinancing facilities to banks on- advances already disbursed by them to cotton textile mills, provided the refinancing was of sums spent by mills on the acquisition of fixed assets during the last three years: a longer period might also be considered in specially deserving cases.

74. In August 1967, the scheme for refinancing of medium term export credit was liberalised; the maximum period of export credit covering capital goods was raised from' 5 to 7 years in deserving cases and up to 10 years in exceptional instances. This facility which was normally available for exporters of capital and engineering goods, was extendei to cover finance for the overall costs of construction projects executed by Indian concern- abroad, where the bulk of the construction contracts constituted equipment, material and" services, etc. of Indian origin. The scheme was also extended to exporters in (he public sector. This facility is now provided at a uniform rate of 4i per cent, and the eligible- banks are required to charge exporters not more than 6 per cent.

75. It was only in respect of IDBT'S scheme of rcdiscnrr.tine of usance bills covering sales of indigenous machinery on deferred payments basis that there was a substantial' increase in operations. The amount of bills rediscounted during the year was Rs. 12.43 crores as compared with Rs. 7.09 crores in 1966-67, bringing the total under the scheme to Rs. 21.85 crores. In August 1967, the terms of the scheme were liberalised; the minimum amount of a transaction covering a set of bills was abolished for agricultural implements and reduced from Rs. 50,000 to Rs. 10,000 for other types of machinery. The maximum limit for bills of any single purchaser, over a year, was raised from Rs. 25 lakhs to Rs. 50 lakhs. The maximum period of deferred payments sales was also extended from 5 years to 7 years in deserving cases covering certain items of machinery. Following the reduction in the Bnnk rate and the subsequent reduction in refinance rates of IDBT¹ in March 1968, the rediscounting rates for hills were reduced by I per cent, all along the line, effective May 10, 1968. t he facility was also extended to sellers/distributors other than machinery manufacturers.

76. Tn order to meet the special problems of the transport industry, the IDBI introduced a new scheme in September 1967 to cover promissory notes arising out of conditional sales nnd resales or on hire-purchase basis of new trucks, jeeps and passenger buses to- road transport operators in the private sector. The rate of rediscount was initially fixed at 6 per cent, per annum with a stipulation that the banks should not charge more than 9 per cent, per annum to the manufacturers or hire-purchase companies: in term the latter were required to charge the road transport operators a rate not more than 7i per cent flat per annum. The rediscount rate was subsequently reduced to 5fr per cent, with the corresponding discount for banks limited to a maximum of 8} per cent, per annum. Though limits aggregating Rs. 3.1 crores were sanctioned to 5 banks upto the end or the year, no promissory notes were received for rediscount.

77 The operations of Ihe other All-India term lending institutions were also at a lower level during the year (April—March). Thus, the sanctions of ICICT (rupee and foreign currency loans, underwriting and direct subscriptions) at Rs. 15-3 crores were below the previous year's Rs. 18.1 crores. Us. disbursements were also somewhat lower at Rs 20 4 crores than Rs. 22.6 crores in 1966-67. Likewise, the total sanctions of the-

Industrial Finance Corporation of India (rupee loans and foreign currency loans, under- writing and direct subscriptions) aggregated Rs. 20.8 crores in 1967-68 (April March) as against Rs ?.1.7 crores in the previous year. Its disbursements too at Rs. 23,9 crores were substantially below the level in the previous year (Rs. 31.2 crores).

78. The loans sanctioned as well as disbursed during 1967-68 (April—March) by the State Financial Corporations (including Madras Industrial Investment Corporation) were .also below the level in the preceding year, but the amount outstanding as at the end of March 1968 was appreciably higher than a year ago, reflecting to some extent lower repayments by borrowers. Thus, loans sanctioned and disbursed by these Corporations during 1967-68 amounted to Rs. 17.0 crores and Rs. 15.2 crores as compared with Rs. 20.2 crores and Rs. 17,3 crores respectively in 1966-67; the loans outstanding as at the end of March 1968 (Rs. 79.4 crores) were higher by Rs. 8 crores than a year ago.

.Financing of small-scale industries;

79. Mention has been made earlier of a few concessions granted by the Reserve .Bank of India and Industrial Development Bank of India to the scheduled commercial banks and other financial institutions in respect of their advances to small-scale industries covered under the Credit Guarantee Scheme (vide para 73) with a view to giving a further fillip to their lending to the small industries.

80. The Credit Guarantee Scheme made substantial progress during the year under .review. The Kescrvc Bank, which is entrusted with the administration of the scheme, • received 22,282 applications for credit limits aggregating Rs. 109.10 crorcs during the year 1967-68 (July—June) as against 19,160 applications for credit limits aggregating Rs. 79.97 crores during the year 1966-67. The amount for which guarantees were actually issued was s:gnificantly higher than in the preceding year; Rs, 109.77 crores as against Rs- 55,97 .crores.

81. As in the previous years, the bulk oE the applications continued to be received from the State Hank of India and its subsidiaries, as they had taken a policy decision to cover all their advances to small-scale industries under the Scheme. However, consequent on the availibility of these concessions, the other commercial banks have also been gradually availing themselves of the guarantee facility in respect of their advances to small-scale industries and a few of the larger scheduled commercial banks have decided to cover all their advances to small-scale industries under tho Credit Guarantee Scheme, During the year, internal procedures were streamlined for the issue of guarantees and the- coverage of (he scheme was extended to include automobile servicing and repairing work- shops. The work under the scheme was also decentralised with tho opening of Regional Offices of the Industrial Finance Department of the Reserve Bank of India, at 3 centres, namely, Calcutta, Madras and New Delhi, besides, Bombay.

82. There was a further increase in the scale of assistance provided by the State Bank of India and its subsidiaries to the small-scale industrial sector during the year (April—March). Thus, tho number of small-scale units assisted by these banks under their 'liberalised' scheme rose from 14,275 as at the end of March 1967 to 17,031 at the end of March 1968. while in the same period total working capital limits sanctioned rose from Rs. 85.62 crores to Rs. 108,25 crorcs. The outstanding advances stood at Rs. 56.96 crores at end-March 1968 as against Rs. 44.65 crores a year ago. Further, these banks instituted a new scheme for extending financial support to new entrepreneurs with technically sound and economically viable projects; similar schemes were also introduced in the course of the year by the Bank of Tndia and the Bank of Baroda.

Unit Trust of India:

83. The operations of the Unit Trust of India (UTI) revealed a substantial rise in the sale of units during 1967-68. During the year ended June 30, 1968, sale of units amounted to Rs. 15.30 crores, as compared with Rs. 9.24 crores in the previous year. As on June 30, XS68 aggregate value of units sold and outstanding was over Rs. 41.13 crores, the total number of unit holders registered with the Trust being over 2,18,000; as on June 30, 1967 the outstanding was Rs. 27 crores, the total number of unit holders registered with the Trust being over 1,69,000.

84. Under the 'Reinvestment Plan' introduced by the Trust in 1966 new applications from unit holders with respect to income distribution for the year ended June 30, 1967 aggregated 6,400, their investments exceeding Rs. 15.6 lakhs; the corresponding figures for the previous year were 4,063 and Rs. 9.5 lakhs.

85. Repurchase of units by the Trust during the year ended June 30, 1968 amounted to Rs. 1.22 crorcs as against Rs. 1,99 crores in the preceding year.

86. The Unit Trust of India announced income distribution at the rate of 7 per cent (70 p;me per unit) to the unit holders for the year ended June 30, 1968, the same as that 'for i.'ie last two years. Income from units upto Rs. 1,000 received by an individual unit holder, it may be mentioned, is free of income-tax, irrespective of his other income.

87. Tofal investments of the Trust increased from Rs. 33.6 crores as at end-May 1967 to Rs. 48.62 crores, as at end-May 1968; of the latter, ordinary shares of corporate -enterprises Hccountcd for Rs. 18.37 crores (37.8 per cent.), preference shares Rs 6 87 crores (14.1 per cent.), debentures Rs. 17.89 crorcs (36.8 per cent.) and bonds of financial •corporations and electricity boards Rs. 0.91 crorcs (1.9 per cent.). The balance of Rs. 4,57 crores represented advance deposits against forthcoming preference and debenture issues which the Trust had agreed to underwrite, application money, treasury bills, cash, and bank and other balances.

'Strengthening of the Banking Structure;

88. The efforts to consolidate the banking system in the country through voluntary merger and compulsory amalgamation were continued during the year. As a result, 'five biinl's transferred their assets and liabilities to five other banks, while one bank was amalsi'.matcd with another bank under Section 45 of the Banking Regulation Act, 1949. During the year under review two non-scheduled banks were ordered to be wound' up by Ihe High Courts. While three non-scheduled banks went into voluntary liquidation after obtaining from the Reserve Bank a certificate under Section 44(1) of the Banking Regulation Act, 1949, certificates under the foregoing Section were also issued to 15 aion-scheduled banks to enable them to go into voluntary liquidation. The inspection report under Section 45 (Q) of the Banking Regulation Act, 1949 in respect of ono non-scheduled bank (in liquidation) was forwarded to the Government of India and the Hiiih Court concerned.

89 !n pursuance of the objective of annual inspection of all banks with a view to stre^ ' :cning the banking system, 54 scheduled and 14 non-scheduled banks were inspected dunny the year under review. AH these inspections were carried out under Section 35 of the Banking Regulation Act, 1949. Seven banks were inspected under .Section 45 (Q"i ibid for judging whether there, are. anv substantial irregularities in their winding up proceedings. Besides, two banks in the former Portuguese Territory were inspected under Sections 14 and 22 of the Goa, Daman and Diu (Banks Reconstruction) Regulation, 1962 to determine their future set-up.

90. Furthermore the affairs of 14 banks were scrutinized for specified purposes, namely '(i) for judging whether there 's a prima facia case for misfeasance proceedings under Section 45L(4) (one bank), (ii) for issue of a certificate under Section 44(1) (10 banks), and (iii) for issue of a certificate under Sections 49B and 49C (three banks).

91. During the period under review comments/rcprcscntations/observations on •inspection reports were received from 62 banks including 8 banks carried over from the previous year. After examining these, directions were issued in 36 cases while 3 banks •were asked to submit periodical progress reports. No action was considered necessary in the case of eight banks. The cases of the remaining 15 banks were under consideration. In suitable cases, representatives of banks were called for discussion with a view to 'bringing to their notice the main defects in the working of the institutions concerned and impressing upon them the need for taking expeditious steps for removing the defects in their working. In cases where the findings of the inspection called for stricter control over the affairs of the concerned banks, suitable directions were issued to them. In respect of banks which are already working under directions issued following their earlier inspections the directions were continued with suitable modifications depending upon the circumstances of each case. With a view to reducing the time lag between the completion of the inspection reports and taking final action thereon, while forwarding copies ol inspection reports, nine banks were asked to take certain specific steps and to submit monthly/quarterly progress reports. There arc at present 48 banks (32 scheduled and 16 non-scheduled) working under directions issued by the Reserve Bank and submitting periodical statements. In 33 cases, observers have been deputed to attend the Board/ Committee meetings of the banks. Besides the banks working under directions, there are at present 22 other banks which are submitting monthly/quarterly progress reports.

.Banking Legislation:

91. A Bill was introduced in the Lok Sabha on December 23, 1967 to amend the 'Batikinc Rceulation Act, 1949 so as to provide for the extension of social control over banks and also to amend the Reserve Bank of India Act, 1934 and the State Bank of India Act, 1955. The objectives of the amendments to the Banking Regulation Act, 1949 arc mainly to achieve an equitable distribution of the resources of the banking

systcm in conformity with the requirements of the economy, so that the needs of the priority sectors may be met. The Bill was referred to a Select Committee of the Lok Sabha, and has since been passed with some amendments by that Sabha. The main provisions of the Bill as amended by the Select Committee are summarised in the following paragraphs,

93. In terms of clause 3 of the Bill, banks will have to reconstitute their Boards of Directors, so that not less than 51 per cent, of the total number of members are persons having special knowledge of or practical experience in certain fields such as accountancy, agriculture und rural economy, small-scalo industry, co-operation, banking, economics, finance and Jaw. The directions in the majority sector should not have substantial, interests in or be connected, as employee; manager or managing agent, with large or medium-.vzed industrial undertakings or trailing or commercial concerns. Of these direc- tors, not less than two are to represent agriculture antl rural economy, co-operation and small-scale industry. In consonance with the spirit of these provisions, each foreign bank is also expected to set. up an advisory board consisting of Indians (w-trt the excep- tiou of the Chief Executive Officer when he is member) with a majority of persons having special knowledge of or practical experience ;n one or more of the fields mentioned above. Each Indian bank is to have a professional banker and not an industrialist as fulltime Chairmnn- The appointment, removal or termination of appointment of the Cha'rman antl the terms to be grante'd to him would require the approval of tho Reserve Bank.

94. After the commencement of the Act, the Brant of any new loans and advances, whether secured or unsecured, to directors or members of any Committee or Board appointed by the banks in India or to concerns in which they are interested as partner, director, manager, managing agent, employee or guarantor or in which they hold substantial interest will be prohibited, except in pursuance of previous commitments; and if the director concerned continues to be a member of the bank's board, the loan, even if it is granted because of any previous commitment, will have to be recovered within a period of one year from the commenment of the Act; the Reserve Baak may, however, in special cases extend the period up to 3 years, The appointment, re-appointment or removal of the auditors of a banking company will in future require tho approval of the Reserve Bank, and the Reserve Bank has been empowered to direct the auditors to audit any specail transactions, which it may specify.

95. The Reserve Bank's powers to appoint directors or observers and to issue directions to banks have been amplified. Such directions may hereafter be issued not only in the interests of depositors or proper management of the banking companies, but also in the interest of banking policy. Banking policy as defined in the Bill means any policy which is specified from time to time by the Reserve Bank in tho interest of the banking system or in the interest of monetary stability or sound economic growth, having due resard to the interests of the depositors, the volume of deposits and other resources of the bank and the need for equitable allocation and the efficient use of these deposits and resources. The inclusion of a reference to banking policy in Sections 21, 35A, 36 and 36 A B of the Banking Regulation Act, has the effect of widening the scope of the Reserve Bank's powers with respect to control over bank advances, directions to banks generally on Hny other matter concerning the affairs of a bank, whether arising out of inspection or other- wise, and the appointment of observers or additional directors by the Reserve Bank.

9fi. In view of the special responsibilities of banks under the Negotiable Instruments Act towards their depositors and the public in general, the Bill provides a new section 36AD, which makes it unlawful to (a) obstruct any person from lawfully entering or leaving n hank's office or from carrying on any business there, (b) hold within such office, demonstrations which arc violent or are calculated to prevent the transactions of normal bus;ness or (c) act in any manner calculated to undermine the confidence of the depositors in the bank concerned, tt has been indicated on behalf of Government that this provision will be without prejudice to (he exercise of normal and lawful trade union rights by the employees.

97. Government is being empowered under the Bill to acquire the business of any bank if it fails more than once to comply with any directions issued to it under section 21 of the Banking Regulation Act in regard to advances or under section 35A of that Act in regard to any other matter concerning the affairs of the bank and if, in addition, the acquisition of the bank is considered necessary in (he interest of the depositors or in the public interest or in the interests of banking policy. Provision has been made for payment of compensation in the event of such acquisition.

98. Although the Bill is yet to be enacted, banks having deposits of Rs, 10 crores and over and all foreign banks have taken or are taking steps to comply with its provisions regarding the reconstitution of boaixls of Directors or constitutions of Advisory Boards. The Indian banks with deposits of Rs. 25 crores or more have in addition appointed wholetime Chairmen,

99. The amendments to the Reserve Bank of India Act, 1934 seek mainly to provide for the revaluation of gold held in the Issue Department at the current parity rate follow- ing the devaluation of the rupee in June 1966, for the valuation of the securtiies held in the Issue Department at or below the market rates instead of at the actual market rates as at present and to simplify the procedure for the refinancing of pre-shipment loans and advances to exporters. The Reserve Bank is also being authorised to operate on behalf of the Central Government a scheme for subsidising the rates of interest charged to exporters by commercial banks or other financial institutions.

100. The amendments to the State Bank of India Act seek to enable the State Bank of India to grant loans and advances for periods not exceeding one year at a time, as compared with six months as at present, and to grant term loans for approved purposes for any period up to fifteen years as compared with ten years at present.

Deposit Insurance Corporation:

101. With a view to extending the coverage of deposit insurance scheme, the Corpo- ration, with the prior approval of the Government of India, increased, with effect from January 1, 1968, the limit of insurance cover in respect of the amounts due to any one depositor from a registered commercial bank from Rs. 1,500 to 5,000 without any change in the present rate of premium, which will continue to be 5 paise per hundred rupees per annum.

102. The number of insured banks declined to 90 at the end of lune 1968 from 96 at the end of June 1967 as a result of the compulsory amalgamation under Section 45i of the Banking Regulation Act, 1949 of one bank with another bank and the transfers of the deposit and other liabilities and equivalent assets of five banks to other insured banks. The Corporation's liability under Section 16 of the Deposit Insurance Corporation Act, 1961 as not attracted in any of these cases. No new bank was registered during the year. The total amount of claims paid or provided for by the Corporation since its inception in respect of eleven banks upto June 1967, which stood at Rs. 57.21 lakhs, was reduced to Rs. 56.85 lakh.-i ift lune 1968, as the Corporation was relieved of the liability to the extent of Rs. 0.36 lakh in respect of certain untraceable depositors, whose balances were vested in the Custodian of Enemy Property. The repayments received by the Corporation so far from the concerned banks in respect of the claims met totalled Rs, 35,02 lakhs, of which those received during the year amounted to Rs. 2.49 lakhs.

Branch Expansion Programme'.

103. During the period July 1967 to Juno 1968, the number of offices opened by com- mercial banks in the private sector under the impetus of the first 3-year programme which ended on July 31, 1965, rose from 602 to 606, the number at unbanked centres remaining the same at 224. The second expansion programme referred to in the last year's report came to an end on July 31, 1967, Under this programme, upto the end of June 1968, I'tencM were issued for 597 new offices as against 508 as at the end of last year. Of these 597 offices, 219 are to be at unbanked centres. Against these licences issued so far banks have opened 569 offices including 210 at unbanked centres.

104. In pursuance of the Bank's policy of promoting systematic expansion of banking facilities to areas devoid of or deficient in such facilities, the second branch expansion programme was followed by another programme for a two-year period ending July 31, 1969. Under this programme, banks are expected to open a relatively large number of offices in rural and semi-urban centres. Upto the end of June 1968, the Bank has approved the opening of 559 offices of these 387 are in rural and semi-urban places, of which, in turn 247 are at unbanked places. The banks have opened upto end-June 1968, 28 offices at banked and 49 at unbanked centres.

105. The branch licensing policy came up for discussion at the first meeting of the, National Credit Council. FollowinR this and after discussions with bankers, the branch licensing procedures were reviewed bv the Central Board of Directors of the Bank in May 1968 and certain modifications were made 'n the guiding principles with a view to adopting a more flexible policy. The commercial banks were urged to make a continuous study of the banking needs and potential of the various regions and to aim at opening a number of branches which should be at least 1/3 more than those opened by them during the

previous two-year programme period As a further measure to step up opening of branches in under-developed areas the All-India and the large regional banks were required to open a reasonable number of branches in such areas (not less than 10 per cent of the total). Within the overall target at least 50 per cent of the offices should be at unbanked centres; besides a like percentage should be at rural and semi-urban centres. Banks would be free to select centres of their choice where they find scope for establishing addi- tional bank offices and requests for allotment of centres will be considered on first come, first served basis except in respect of (a) small places having a population of 5,000 or less (where the suitability of the places for offices of co-operative banks would have to be considered), (b) bigger cities having a population of one million and above and port towns and (c) places which are regarded as adequately banked on population basis. These cases will be reserved for detailed consideration,

106. The applications of the State Bank of India and its subsidiaries otherwise than for taking over treasury work and for other developmental purposes are generally con- sidered on the basis of the principles applicable to other comercial banks. During the period July 1, 1967 to June 30, 1968, the State Bank of India opened two more branches under its second expansion programme, thus, bringing the total number of branch¹' /SmipisqnB oqi 'g96I '0£ a unf oi L^(,\ '\ Amf pousd ouj 8mjna T£Z 1" spuBjs aumjFuflojd niqj jspun pausdo .TBJ OS ssupUEjq jo jaqumn pjjo} sqj pUB gcjfjj 'o£ sunf 04 i_ij(,i 'X Amf p o u ad sip Supnp ssqouBjq ^p pausdo req JI 'sajjrao Ajns^ojj-qiis/XjnsBOj) 113 ssqocrejq 6i£ nsdo oj psijnbai sj ufpui jo :>(nBg o ws sm tpjqAi .40 SIUJSJ in '(8961 ' [£ j s q m s o sQ oj f96l '[ AJcnuraf poijod gqi SUUOAOO) 3iuui8J3ojd uoisimdys P-"qi aqj J ³PUQ •3iuiuBj8oad ]eqi JOJ paAOJddu SSJJUOT C91 JS'UI-HSB W WI oj suiraejSo.id siqj jspun pauado banks have opened 56 branches (including four one-man offices) under their second five- year expansion programme ending June 1970. Thus, during the above period; the State Bank of India and its subsidiaries, opened 105 branches under their expansion programme* The total number of offices of the State Bank of India and its subsidiaries as at the c of June 1968 stood at 2,295 as against 2,146 as at the end of June 1967.

107. The policy of permitting foreign banks to open branches at port towns on a restricted scale is being continued.

108. With the establishment of five more clearing houses, the total number of clearing houses in the country as at the end of June 1968 was 94; of these seven were managed by the Reserve Bank of India, 69 by the State Bank of India and 18 by the subsidiaries of the State Bank of India.

Regulation oi Business of Non-banking Institutions Helatinx to Acceptance oi Deposits:

109. Following the issue of two directives in October 1966, a number of representations were received to the effect that, in view of the recessionary trends in the economy, some relief should be granted to non-banking companies regarding the acceptance of deposits from the public. The Bank, on a review of the position, came to the conclusion that no basic changes in the framework of the control were necessary or desirable. However, to obviate hardships, particularly to industrial undertakings, in complying with the provisions of the directives within the specified time limit the Bank made certain modifications in the directives on August 23, 1967 so as to provide for : (a) the inclusion of the 'statu- tory development rebate reserve' within the definition of 'free reserve' in respect of both financial and non-financial companies : and (b) the extension of the period for the adjust- ment of the excess deposits as on January 1, 1967, from two years to five years in respect of industrial concerns which have declared dividends on their equity shares at the rate of 6 per cent or more in five out of 6 or 7 years prior to January 1, 1967 or have unencum- . bered fixed assets of a book value of not less than twice the amount of deposits and unsecured loans.

110. These concessions do not involve any departure from the policy underlying the issue of the revised and amplified directives in October 1966. They will, however, make it possible for all sound and well managed industrial concerns to comply without any difficulty, with the requirements regarding the adjustment of the deposits in excess of twenty-five per cent of their paid-up capital and free reserves. As the development rebate reserve is now counted as a free reserve, the amount of the excess which is required to be adjusted has been substantially reduced. In the case of many industrial companies, there may also be some additional scope, in view of this concession, for the acceptance' of further deposits from the public.

111. A survey of deposits with non-banking companies, based on the returns received from them as on March 31, 1966, showed that 2,357 companies as against 1,909 as on March 31,, 1965) accepted deposits as on that date; of these, 393 were financial com- panies and 1,964 non-flnancial companies. Total deposits accepted by them stood as on that date at Rs. 283.41 crores representing an increase of Rs. 74.26 crores over the deposit* reported as at the end of March 1965. The total number of deposit accounts increased by about 86,000 to 3,67,300.

HI. DEVELOPMENTS IN COOPERATIVE BANKING

112. The Bank made further efforts, in so far as they lie within its purview, in regard to the re-organisation of the co-operative credit structure on the basis of viability and adoption of the crop loan system with a view to ensuring an adequate flow of credit for the programmes of intensive development of agriculture.

113. Among the important developments during the year in the sphere of co-operative banking, was the introduction in Parliament of two bills, namely, (a) Banking Laws (Amendment) Bill, 1967 incorporating certain amendments to Part V of the Banking Regulation Act, and the Reserve Bank of India Act and (b) the Deposit Insurancb Corporation (Amendment) Bill, 1967 with a view to extending facilities for deposit insurance to co-operative banks.

114. In the sphere of co-operative credit policy, a reference was made in the last report to the appointment, by the Reserve Bank of India, of the All-India Rural Credit Review Committee and the Working Group on Industrial Financing through Co-operative Banks. The various issues referred to them were under their consideration. The Fertiliser Credit Committee appointed by the Fertiliser Association of India in 1966 under the Chairman- ship of Shri B. Venkatappiah to examine and make specific proposals in regard to the credit required for the distribution of fertilisers submitted its report in February 1968. One of the important recommendations of the Committee was the setting up of a Fertiliser Credit Guarantee Corporation for ensuring adequate institutional credit facilities for distribution of fertilisers. The recommendations of the Committee in so far as they call for action on the part of the Bank are being examined in the concerned Departments.

Co-operative Credit : Policy Procedures and Operations

115. With the reduction in the Bank rate from 6 per cent to 5 per cent from March 1, 1968, the concessional rate of interests to State co-operate banks for seasonal agri- cultural operations and marketing of crops was reduced from 4 per cent to 3 per cent, thus keeping the concession at the existing level of 2 pe rcent below the Bank rate. The benefit of reduction in the Bank rate was extended to the other types of finance provided 'by the Bank to the State co-operative banks, vi^., for medium-term loans for agricultural purposes and for the production and marketing activities of handloom weavers' societies, reducing the rate from 45 per cent to 3J per cent.

116. In pursuance of tfae directives issued by the Bank prescribing the maintenance of minimum margins on advances against cotton and kapas made by .State and Central co- operative banks and ceilings in regard to suc)h advances referred to in para 133 below), it was decided that no part of the financial accommodation under the credit limits sanc- tioned by the Bank for seasonal agricultural ope>ations and marketing of crops should be used by the co-operative banks for financing the marketing of cotton and kapas, and that the Bank should sanction separate credit limits to State co-operative bunks for financing the marketing of cotton and kapas under Section 17(2) (b) or (4) (c)/17(4) (c) of the Reserve Bank of India Act, at the concessional rate of 2 per cent below the Bank rate.

117. Another decision related to the extension of short-term and medium-lerm credit facilities for poultry fanning. In order to enable the State Governments to set up strong poultry co-operatives which can utilise the Plan resources earmarked, for poultry pro- grammes, the Government of India had requested the Bank to consider the extension of credit facilities to cover the credit requirements of poultry farming also. The Bank accordingly decided in November 1967 to recognise, under certain conditions, poultry co-operatives also as the channel for the flow of the Reserve- Bani-'s short-term and medium-term loans for agricultural purposes for financing their agriculturist members.

118. As mentioned in last year's report, no special credit limits were to be sanctioned by the Bank for the High-Yielding Varieties programme during'- the year 1967-68 since the requirements of the programme were taken into account while sanctioninfl the normal •credit limits, The Bank sanctioned supplementary credit limits in respect of certain central

co-operative banks in whose areas the High-Yielding Varieties Programme was under implementation.

119. The total credit limits sanctioned by the Bank to State co-operative banks for financing seasonal agricultural operations and marketing of crops at the concessional rale of 2 per cent below the Bank rate increased from Rs. 257,50 crores (inclusive of the special limits for High-Yielding Varieties Programme) in 1966-67 to Rs. 314.15 crores in 1967-68. Drawals aggregated Rs. 364.89 crores as afiainst Rs. 289.25 crores in 1966-67. while repayments were Rs. 362.52 crores as against Rs. 297.60 crores in 1966-67. The outstandings as on June 30, 1968 stood at Rs. 137.17 crores as compared with Rs. 135.38 crores as on the Juno 30, 1967. The Bank also sanctioned a short-term credit limit of Rs. 10.25 croros to a State co-operative bank for financing the marketing of cotton and kapas in the context of the decision to regulate the advances of co-operative bank's against the security of cotton and kapas referred to earlier. The drawals against the limit were Rs. 10.54 crores, repayments were Rs. 9.34 crores and the outstandings as on June 30, 1968 were Rs. 1.20 crores. In addition to accommodation for agricultural purposes at concessional rate of interest, short-term finance amounting to Rs. 14.55 crores as against Rs. 0.80 crore during 1966-67, was also made available at the Bank rate to State co^ operative banks for general banking purposes.

120. The short-term credit limits which the Bank sanctioned during the calendar year 1967 for financing the stocking and distribution of chemical fertilisers at the Bank rate against Government guarantee under Section 17(4) (c) of the Reserve Bank of India Act have been continued during the calendar year 1968. During the year 1967, rhc limits sanctioned, drawals and outstandings at the end of the year were, Rs, 33.00 crores, Rs. 27.65 crores and Rs, 15.49 crores, respectively: the corresponding figures for 19(>8 upto tho end of June of that year (compared with the June-endine figures of 1967), were Rs. 22.00 crores (Rs. 27.00 crores), Rs. 16.34 crores (nil) and Rs. 5.42 crores (nil).

121. Besides agreeing to provide medium-term credit for poultry farming by agricul- turist members of primary credit societies and poultry co-operatives, the Bank agreed to grant medium-term loans for 5 years to a largo extent to facilitate the implementation of productive srJhemes, of medium-term lending. As regards the security for medium-term loans, the Bank had been stipulating that while loans for amounts upto Rs. 500 miizhtr be made by agricultural credit societies against personal sureties, loans between Rs. 501 to Rs. 1,000 should be against the statutory chnreo on the land by the borrowers irr favour of the societies and loans above Rs. 1,000 onlv awu'nst mortgage of land. These conditions were relaxed by the Bank as recommends by the Standing Advisory Committee on Rural and Co-operfitJvc Credit. Medium-term loans might be ijivon against personal sureties upto Rs. t.000, between Rs. 1,001 and Rs. 1.5flO on a statutory char?? on land and for amounts exceeding Rs. 1.500 against mortgage of land.

122. During the year under report, the medium-term loans sanctioned by the Reserve Bank at a concessional rate of H per cent below the Bank rate amounted to Rs. 16.37 crores as against loans of Rs. 15.34 crores sanctioned last year. Besides, lo^ns amounting to Rs. 0.20 croro were sanctioned at the Bank rate for purchase of shares n sugar factories. Drawals on the limit came to Rs, 9.12 crores as compared with Rs. 8.37 crorea In the previous year; outstandings as on June 30, 1968 were Rs. 16.47 crores.

123. In regard to the financial accommodation to State co-operative banks for financing the production and marketing of handloom weavers' societies, the concessions allowed tr> weavers' societies In regard to tho basis for fixing normal credit limits and to the main- tenance of margins, in the context of change-over from per loom basis to production basis (to which a reference was made in the last report), were continued during 1967-6S also. On the recommendation of the Standing Finance Committee of the All-India Handloom Board, it was decided to etxend the credit facility under Section 17 (2)(bb) of the Reserve Bank of India Act for financing production and marketing activities of silk and woollen handloom weavers' societies also from the financial year 1968-69 onwards. During the financial year ended March 1968 the State co-operative banks were sanctioned¹ credit limit aggregating Rs. 7.59 crores under Section 17(2) (bb) or (4)(c) of the Reserve Bank of India Act at 1} per cent below the Bank rate as against Rs. 6.48 crores sanctioned during the financial year 1966-67. The drawals amounting to Rs. 8.54 crores at against Rs. 4.87 crores in 1966-67 and the outstandincs at the end of the year stood at Rs. 5,44 crores as against Rs. 4.85 crores. One State co-operative bank was sanctioned a credit limit of Rs. 0,34 crore under Section 17(4)(a) of the Reserve Bank of India Act at the concessional rate of 1$ per cent below the Bank rate for financing: handloom weavers* co-operatives during the fiscal year. The outstandlngs at the end of the year against this limit amounted to Rs. 0.17 crore. The Bank also sanctioned during the financial year 1967-68 Rs. 1.05 crores as against Rs. 1.00 cTOrc la 1966-67. at Bank rate under Section

17(2)(a1 or 4(c) of the Reserve Bank of India Act for financing commercial or trade transactions of apex handloom weavers' societies, Drawals aggregated to Rs. 1.73 crorcs as compared to Rs. 0.58 crore in l%6-67, and the outstan'dings were Rs. 0,24 crore at the end of the financial year J 967-68 and also at the end of 1966-67.

124. In view of the prevalence of scarcity conditions in certain parts of the country, the Bank had sanctioned credit limjts to the extent of Rs. 53.50 Jakhs in respect of two banks out of the National Agricultural Credit (Stabilization) Fund for conversion of short- term loans medium-term loans in the areas affected by drought as against Rs. 7.45 crores during 1566-67, One bank drew in full the limit of Rs. 11 lakhs sanctioned to it while the drawals in 1966-67 amounted to Rs, 6.43 crores, The outstanding against the State co-operative banks as at the end of June, 1968 were Rs, 6.14 crores while the corresponding figure as at the end of June 1967 was Rs. 8.82 crores.

125. At its thirty-sixth meeting held on May 23, 1967 the Standing Advisory Committee -on Rural and Co-operative Credit recommended that assistance to State Governments in regard to building up of stabilization funds erf State co-operative banks should be fully by way of grants instead of providing such assistance partly as grants and partly as loans. The recommendation of the Committee was communicated to the Government of India. The pattern of assistance approved by the Government of India envisages that 25 per cent of the amount will be given as interest-bearing loans and 75 per cent as grants; in respect •of Madras and Maharashtra, however, the assistance will be provided in the form of loans And grants in equal proportions. During the financial year 1967-68, the Government of India made a provision of Rs. 3.50 crorcs, as against Rs. 6.78 crores for 1966-67, for Central assistance to the State Governments for the purpose.

126. In view of the meagre funds built up under-State Governments' Agricultural Credit (Relief and Guarantee) Funds, the Central Government has requested the State Govern- ments to build up those. Funds up to a level of J per cent of the outstandings at primary level by the end of 1970-71,

127. During the year under report, the Bank in consultation with the Government of India., made certain relaxations in the procedure for sanctioning long-term loans from the National Agricultural Credit (Long-term Operations) Fund to State Government for contribution to Ihe share capital of primary agricultural credit societies. The conditions requiring the consent of 60 per cent of the members of primary agricultural credit societies for State participation in their share capital and the support of the proposal by tile Central co-opcrat;ve bank concerned were waived. Further, the Bank dispensed with the condition of matching contribution by members of the primary agricultural credit societies in regard to Government's participation in their share capital up to Rs. 5>,000. In other words, a mini- mum contribution of Rs. 5,000 was permitted in the case of each viable or potentially viable primary agricultural cre'd't society. For every increase of Ks. 10,000 over and above Rs. 30.000 in the loan and other business of the¹ society, the State Government could contri- bute an additional amount of Rs, 1,000 to the Society's share; capital. The ceiling for total Government contribution to the share capital of a society was, however, retained at Rs. 10,000. These relaxations were made with a view to facilitating an easier acceis to State participation by primary agricultural credit societies on a more liberal scale as compared to the previous yeur, in the context of the implementation of intensive programme of agricultural development over large parts of the country.

128. Loans amounting to Rs. 7,32 crores (excluding renewals of Rs. 4.42 lakhs) were sanctioned to 15 State Governments durinfi the financial year 1967-68 (as against Rs. 2.47 crores during 1966-67) out of the National Agricultural Credit (Long-term Operations) Fund under Section 17 (4AA) read with Seqtion 46A(2) (a) of the Reserve Bank of India Act for contributing to the share capital of three State co-operative banks, Ml central co-operative banks, 2,016 primary agricultural credit societies and eight central land development banks. The total drawals by the State Governments during the financial year 1967-68 amounted to Ks. 7,28 crores as against Rs. 2.27 crores in 1966-67 and their repayments in respect of previous loans were of the order of Rs. 3.88 ctrores as against Rs. 3.47 crorcs repaid in 1966-67. The total amount outstanding against the State Govern- ments on this account was Rs, 31.70 crores as on March 31, 1968 as against Rs. 28.22 crores as on March 31, 1967.

129. The Reserve Bank convened in March 1968 a meeting of the representatives of the central land development banks, the Life Insurance Corporation of India, the State Bank of India and the Government of India to discuss the debentures programme of the central land development banks for th" year 1968-69. A supported programme of Rs. 86 crores was approved as compared vilh a proeramme of Rs. 57.40 crores fixed for 1967-fiR. The support from the public sector institutions as well as of the Government of India was kept at the same level as i;i 1967-68, viz., Rs. 34.50 crores. For ^locating the

support among the various central land development banks, in 1967-68, such banks wera placed into A, B and C categories with reference to their stage of development, the least developed banks getting maximum support. For the year 1968-69, however, in grouping the central land development banks special note was taken of their overdues in relation to demand. In the case of developed banks having overdues exceeding a certain level, the support was fixed at 30 per cent of the programme whereas banks with relatively less overdues were to get 40 per cent of their programme. The support in respect of underdeveloped banks was retained at 60 per cent of their programme.

130. A significant development in the field of long-term finance was the emergence. of commercial banks us investors in the debentures of central land .development banks on a fairly sizeable scale. The commercial banks contributed during 1967-68 Rs. 18.13 crores to the debentures of various land development banks as compared with Rs. 3.85 crorcs in the previous year. With this additional support, the central land development banks had issued during the year ended March 1968 ordinary debentures of Rs. 71,18 crorcs as against Rs. 58.02 crores in 1966-67. Of the supported programme of Rs. 57.40 crores during 1967-68, Rs. 4.76 crores were taken up by the Reserve Bank (as against Rs. 4-37 crores in 1966-67), while the State Bank contributed Rs. 4-49 crores, the Life Insurance Corporation Rs. 10.43 crores, the State Governments Rs. 12.40 crores and ths Government of India subscribed Rs. 14.90 crores. The contribution from co-operative institutions came to Rs, 7.23 crores. During the year, the central land development banks also floated rural debentures for Rsi. 1.85 crores to which the Bank subscribed to the extent of Rs. 0-98 crore as against Rs. 1-63 crores in 1966-67. On June 30, 1968, the Bank'& holdings in ordinary and rural debentures were of the order of Rs. 24,38 crores and Rs. 7-94 crores respectively asi against Rs. 20.74 crores and Rs. 7,20 crores as on June 30, 1967.

131. In the context of the growing volume of operations of the co-operative credit structure the Bank has been emphasising the need to ensure that credit is used only for productive purposes. A reference may be made in this connection to (i) efforts to further spread the crop loan system in order to bring about productive - short-term lending, (il) rationalisation of policies regarding medium-term loans on the part of the co-operative banking structure so that they finance only genuinely productive medium-term loans for specific purposes, and (iii) efforts made to regulate the operation of credit limits sanctioned by the Reserve Bank with a view to preventine their diversion for non-productive purposes. During the course of inspection of co-operative banks conducted by the Bank as well as in conferences, meetinfis, etc., special stress was laid on the adoption of the crop loan system. As indicated in the last report, the Bank has attempted to give wide publicity to the important features of this system through a Manual published in June 1966. This Manual has also been translated and published by the concerned agencies in some regional languages. In order to ensure productive use of medium-term loans the Bank has' been trying to impress upon the co-operative banks the need for a detailed examination of loan applications where the purposes are stated vaguely. It has also been indicated that medium-term loans for sinking of new wells, installation of pump-sets, tube-wells, etc., should be carefully examined with reference to the Dossible cropping pattern, repaying capacity, economic feasibility, etc., by obtaining necessary details from the members concerned. It was observed that, there was a tendency on the part of State co-operative banks to draw upon the credit limits sanctioned by the Reserve Bank especially towards the close of the co-operative year without due regard to the actual need for funds. The funds in excess of their minimum requirements were kept by the banks in current or call deposits. In this connection the need for timely submission of credit limit applications was emphasised by the Bank so that there was no time-lag between the lapse of credit limits for one year and the sanctioned of fresh limits for the new year, which encourages unwarranted drawals towards the end of the year.

132. Forty eight new societies came under the purview of the Banking Regulation Act, 1949 (as applicable to co-operative Societies) as a result of inclusion of their names in the list of co-operative banks while the names of 276 societies were excluded from the list Thus at the end of the year under report, there were 1422 co-operative banks coming under the purview of the Act (viz., 28 State, 368 centra! and 1026 primary banks) as against 1650 co-operative banks (viz., 29 State, 381 central and 1240 primary banks) at the beginning of the year. The primary co-operative banks numbering 1026 as on June 30 1968 comprised 604 urban banks and 422 salary earners' societies as against 560 urban banks and 680 salary earners' societies coming under the purview of the Act at the beginning of the year. When the statutory control of the Bank was extended to co operative banks, many salary earners' societies were listed as primary co-operative banks as they had provision in their by-laws for acceptance of deposits. Most of theae societies desired to go out of the purview of the Act. As it was not intended to bring BTjch societies under the purview of the statutory control of the Bank, it was decided to

advise these societies to take certain stops so that they could be declared as non-banking institutions under Section 36A(2) of the Act. Further, it was also decided that the names of such societies as had never accepted deposits from non-members might be deleted from the list of primary co-operative banks on completion of certain formalities by them. The steep decline in the number of salary earners' societies coming under the purview of the Act during the year under report was due to their taking advantage of the above facilities. The reduction of one in the number of State co-operative banks during the year was due to the withdrawal of iho notification declaring West Bengal State Housing Finance co-operative society as a State co-operative bank bv the Government of West Bengal. The number of scheduled state co-operative banks remained unchanged at 12 at the en'd of June 30, 1968.

133. A mention was made in the previous report regarding the issue of two directives to State and central co-operative banks imposing a limited control oa their advances against cotton and kapas. Following the issue of a directive by the Bank to all scheduled commercial banks in this regard on November 1, 1967, a directive in supersession of the earlier directives was issued by the Agricultural Credit Department on November 16, 1967, prescribing maintenance by State and central co-operative banks of a minimum margin of 25 per cent on pledge advances and 40 per cent on hypothecation advances granted by them The relevant margins were subsequently relaxed in December 1967 to 10 and 20 per cent respectively in the case of credit limits granted to co-operative cotton mills against the security of ootton and kapas which are fully guaranteed by the State Govern- ment with regard to the repayment of principal and payment of interest thereon. It was also stipulated that the aggregate credit limit against the security of cotton and kapas shall not exceed 10 per cent of the total liabilities in India as on last Friday in October 1967 in the case of State co-operative banks other than those in Union Territories and 20 per cent in tne case of central banks and State co-operative banks in Union Territories. It was, however, provided that the requirements of co-operative banks for financing the marketing of cotton over and above the limits as stipulated above could be met from out of special credit limits for the purpose from the Reserve Bank of India under Section 17(2) (b) or (4) (c) of the Act. These restrictions were intended to regulate the flow of co-operative credit for financing the marketing of cotton in the context of a rising trend in cotton prices. In view of the improved supply position of indigenous ciotton and kapas, a fresh directive was issued in April 1968 to all State and central co-operative banks raising the limit prescribed for the aggregate level of credit which the banks could grant against the security of cotton and kapas from their total liabilities in India to 20 per cent in the case of state co-operative banks other than those in Union Territories and to 40 per cent in the case of State co-operative banks in Union Territories and central co- operative banks. This relaxation was given upto the period ending June 30, 1968.

134. During the year, 12 State co-operative banks, 293 central co-operative banks and 286 primary banks were inspected in terms of Section 35 of Banking Regulation Act, 1949, of which 100 primary co-operative banks were inspected by the officers of the State co- operative banks on behalf of the Reserve Bank of India as provided for under Section 35(1) of the Banking Regulation Act, 1949 and (he rest by the officers of the Bank- During the year 12 central land development banks, 4 apex handloom weavers' societies and 2 apex marketing societies were inspected by the Bank as hitherto on a voluntary basis. Copies of inspection reports of 21 State co-operative banks including one State industrial co-operative bank, 264 central co-operative banks including 5 district industrial co-operative banks and 227 primary co-operative banks were furnished to the banks concerned in terms of Section 35 (1) of the; Banking Regulation Act. Inspection reports relating to 11 State land dev?lopment banks, 5 State handloom weavers' societies and one apex marketing society were also furnished to the concerned institutions during the year under report.

Co-operative T>evelopm?nl

135. The Bank's Standing Advisory Committee on Rural and Co-operative Credit met once during the year under report on January 23, 1968 and considered subjects such as security for medium-term loans for agricultural purposes, medium-term loans for purchase of shares in co-operative processing societies, training of Registrars of co-operativo societies and certain aspects of the role of commercial banks in agricultural credit.

136. Among other important developments, mention may be made of the Conference of States' Chief Ministers and Ministers for Co-operation held at Madras in June 1968. The Conference was attended by the Deputy Governor in charge of Rural Credit. The- subjects discussed at the Conference included:

(i) measures for curbing vested interests in the co-operative movemetn,

(//) diversification of the sources of production credit within the movement for agricultural production; and

(Hi) formation of cadres of co-operative personnel for credit, marketing and pro- cessing and consumers' societies.

137. A reference was made in the previous yew's report about the recommendation of the Informal Group on Institutional Arrangements for Agricultural Credit for the esta- blishment of agricultural credit corporations in certain States and Union Territories where the present co-operative structure is weak. On the lines recommended by the Informal Group, the State Agricultural Credit Corporations Bill, 1968 was introduced in Parlia- ment in May 1968 for the establishment of agricultural credit corporations in the States of Assam, Bihar, West Bengal, Orissa and Rajasthan and the Union Territories of Manipur and Tripura.

138. As mentioned earlier, a Bill called the Deposit Insurance Corporation Amend- ment Bill, 1967 was introduced in the Lok Sabha on July 17, 1967. The Bill seeks to extend the benefit of deposit insurance to co-operative banks if the law for the time being In force in the State relating to co-operative societies provides that an order for winding up or an order sanctioning a scheme of compromise or arrangement or amalgamation or reconstruction of any co-operative bank can be made with the previous sanction in writing of the Reserve Bank of India. In other words, the benefit of insurance of deposits can be extended to co-operative banks if the State Governments amend the State co-operative societies Act on the lines indicated above. Some ol the State Governments have already agreed in principle to amend their respective Acts for enabling the Deposit Insurance Corporation to extend the benefit of deposit insurance to co-operative banks and a few States have already initiated action in this regard

139. As in previous years, the Deputy Governor in charge of Rural Credit held dis- cussions with the official and non-official representatives of the co-operative movement in the various States during January-June 1968. Besides basic issues such as the re- organisation of the primary credit structure on the basis of viability, adoption of the crop loan system and rehabilitation of weak central banks, operational problems such as the prevalence of heavy overdues, inadequacy of banks' own resources, inadequacy regarding audit, supervision etc. were discussed. Follow-up action on theso discussions is being pursued by the Agricultural Credit Department.

140. The Bank continued to provide study facilities to the senior officers of the co- operative departments of State Governments, the number of officials who were provided such facilities being 12 during the year under report, In the context of the entry of commercial banks in the field of agricultural finance, study facilities were extended to two officers of commercial banks in the Agricultural Credit Department of the Bank. Study facilities were also provided to certain officials of the Bank of Thailand, Nepal Rashtra Bank, Peoples' Bank, Ceylon, etc.

Development in Linking Credit with Marketing

141. During the year under report, efforts continued to be made to forge an organic link between co-operative credit and marketing. The value of agricultural produce marketed by the co-operatives during 1966-67 was of the order of Rs. 335 crores including RS 144.45 crores worth of foodgrains as compared to Rs. 360-41 crores during 1965-66. The recoveries out of sale proceeds towards the dues of primary agricultural credit societies were Rs. 33.00 crores during 1965-66, as against Rs. 30 crores during 1964 65.

142 The co-operatives have constructed out of their own resources about 1200 godowns at mandi level and 2000 godowns in rural areas during 1966-67 as against 1000 godowns at mandi level and 1500 godowns in rural areas during 1965-66. Further, a total number of 14195 rural godowns and 3281 godowns at mandi level were given financial assistance by the Government upto the end of 1966-67 as against 12288 rural godowns and 2681 godowns at mandi level upto the end of 1965-66. The storage capacity of these godowns was expected to be about 2-5 million tonnes.

Agricultural Refinance Corporation:

143 During the year 1967-68 the Corporation sanctioned as many as 89 schemes relating to development of land, such as minor irrigation and land reclamation, develop- ment of plantation crops like tea, coffee, rubber, cardamom apple coconut, p-neapple, etc development of poultry and fishery and purchase of agricultural implements such as Actors andTower tillers. The States to benefit by these 89 schemes are Andhra Pradesh, TOW GriarSt Harvana Jammu and Kashmir. Kerala. Madhya Pradesh. Madras M"ta- S t r a, K r e , ^ i a S w e s ? B e n g al and Utter Pradesh and the Union Territory of Delhi

The total financial outlay involved in these schemes was of the order of Rs. 68-16 crorcs and the Corporation's commitments in respect thereof, amounted to Rs. 58'64 crores or 86 piir cent of the outlay. As against this, 15 schemes involving a financial outlay of Rs. 10 53 crores were sanctioned during 1966-67, the Corporation's commitment being Rs. 8-53 cronw. •

144. Of the 89 schemes, 69 schemes are to be financed by central land development banks, the refinance amounting to Rs. 5490 crores to be provided in the form of subs- cription lo the special development debentures to lie floated for the purpose; 7 schemes involving refinance of Rs. 2-47 crores are through State co-operative banks and the remaining 13 schemes are to be financed by the scheduled commercial banks involving refinance to the extent of Rs. 1 -27 crores. All the schemes are to be implemented over a period of years. Compared with the previous year, there has been a substantial increase boih in the number and the amount of refinance extended by these agencies. During the preceding year out of 15 schemes involving Rs. 10-53 crorea, 4 were to be financed by central land development banks, 2 through a State Co-operative bank, and 9 through scheduled commercial banks, the respective amounts of refinance being Rs. 5.29 crores, Rs. 1-28 crores and Rs. 1 96 crores.

145. Taking into consideration the changes in the outlay of some schemes sanctioned earlier as a result of rephasing, etc., the total number of schemes sanctioned by the Corporation, during its five years of working is 128, the total financial outlay and the Corporation's commitment being Rs, 107-57 crores and Rs. 90-59 erores respectively. In addition to the schemes actually sanctioned, several schemes are under the considera- tion of the Corporation.

146. During the year under review, the Corporation disbursed a sum of Rs. 5-23 crores in the form of contribution to the special development debentures floated by the central land development banks under the schemes for the reclarnation and development of land, soil conservation, minor irrigation, plantation, etc. Rs. 0-20 crores to the State co- operative banks and Rs. 0 24 crore to the scheduled commercial banks. Thus, the total disbursement made during the year amounted to Us, 5-67 crores as against Rs. 2-08 crores disbursed during the previous year, The Corporation has so far disbursed Rs. 12-65 crovos.

147. In regard to the policy on procedures for the sanction of refinance the Corporation made further relaxation in its policy for financing area development schemes under minor irrigation projects during the year. It had earlier stipulated a condition to the effect that the construction programme of wells should invariably be preceded by detailed ground water surveys and investigations. It has now been decided that a certificate froro the concerned technical department of the State Government supported by investigations of u scientific nature would be acceptable. Further, the Corporation agreed, in view of the strained resources position of the State Governments, to accept, as a special case, in respect of minor irrigation schemes sanctioned during the year under review, a reduced contribution of not less than 10 per cent by the State Government to the special develop- ment debentures to be floated by the central land mortgage banks instead of the usual 25 per cent. This facility has been extended to one more year, i.e., upto June 30, 1969.

148. Recently, the Corporation has agreed to provide through central land develop- ment banks refinance facilities in respect of loans advanced by them to farmers for the expenditure incurred by the latter by way of charges paid to the Electricity Board or deposits kept with the Electricity Board for obtaining electric connections through tow and high tension lines to enable the farmers to energise their wells. This facility has been restricted to a ceiling of Rs. 3,000 per connection and is subject to the entire loan amount for which refinance is given being within the repaying capacity of the borrowing former.

149. Regarding its financial assistance through the scheduled commercial banks, the Corporation decided that in case the cultivators in a particular area showed a preference for obtaining finance through a scheduled bank, refinance facilities could be made available to the scheduled bank, especially in areas where the cultivators came under the area of •operation of a sugar factory and the factory is prepared to assist the bank in supervision, technical guidance, recovery of loans, etc, The Corporation also decided to entertain proposals from scheduled banks for financing the purchase of power tillers, tractors, pumpsets, etc., and provide refinance for the purpose, provided that the schemes are drawn up keeping in view the area development aspect. Detailed circular letters were also issued to the scheduled commercial banks giving guidelines for formulating schemes of minor irrigation, land reclamation, etc., and for the development of poultry, dairying and fisheries. The Reserve Bank of Tndia agreed that loans for medium-term and long-term purposes for agricultural development advanced by scheduled commercial banks, under refinance arrange- ments with the Corporation, mov be excluded from the norm of 5 per cent which tne banks are expected to maintain between their term lendings and deposits.

150. During the year under review, the Corporation brought out two booklets, one each on coffee and cardamom plantations for the benefit of planters, explaining in detail the terms and conditions und the procedure to be followed for obtaining refinance from the Corporation in respect of schemes for the development of these plantation crops.

IV. EDUCATION AND TRAINING

151. In pursuance of the Deputy Prime Minister's statement in the Parliament on social control over banks, stressing among other things, the need for improving the quality ot personnel of banks, in Governor set up in December 1967 a Working Group for review- ing the training facilities for senior and middle level personnel of commercial banks. The Group recommended a two-tier training structure for officers of commercial banks to meet both the quality and the extent of training effort. The Group suggested the setting up of a National Institute of Bank Management to initiate and co-ordinate measures for the development of the banking profession in the country at the highest level. The Institute would constitute the first tier of the training structure contemplated by tho Group. The training institutions of the commercial banks which provide training at the junior officer and clerical levels would constitute the second tier after suitable re-organi- zation. Necessary follow-up action on the Working Group's recommendations is in progress.

152. During 1967-68, two new courses were started in the Bankers' Training College, Bombay A new course on Agricultural Finance has been instituted with a view to providing intensive training in farm finance, tailored to the needs of the managerial staff of commercial banks and to facilitate their entry into the new field of farm finance. Tho pilot course was held from December 18, 1967 to February 3, t968 and was attended by 33 trainees. The second course in which 25 trainees participated was held in March- April 1968.

153 A new course for the managerial staff of the urban co-operative banks has been instituted with a view to equipping the key personnel of these banks with knowledge of practices and procedures of modern banking. The first (pilot) course of e.ght weeks- duration was held from October 16, 1967, which was attended by 31 officials The second course of same duration was held from March 4, 1968 and 30 officials attended it.

154 The Reserve Bunk continued to sponsor and organise training courses for the supervisor"personnel of commercial banks in the Bankers' Training College Bombay. Kg the year the College conducted three Senior, Courses, three Intermediate Courses, " " "S m,™ ; l . ri in Foreign Exchange, Industrial Finance and Personnel and Organiza- tion Thetotal number of bank officials who received training in the College during the year' w£J 327indudfng 8 officials from foreign countries). Smce the inception of the CoHeg?'in 1954 2,892 officials have received training in the different courses, conducted for the supervisory staff of commercial banks.

155 The Bank continued to arrange courses in banking for the managerial * * " of

EfSH"s^:::r;:r:r:

year ended June 30, 1967.

V. ACCOUNTS AND OTHER MATTERS

crores in the previous year. The expenditure, which included establishment expenses turnover commission to the State Bank of India and its subsidiaries for conduct of Government business and provision for sundry liabilities amounted to Rs. 27-92 crore* as against Rs. 25-12 crorcs in the previous year. The net profit available for payment to Central Government was Rs. 65 crores as against Rs. 60 orores paid during 1966-67.

160. The contributions to the National Agricultural Credit (Long-term Operations) Fund, ihc National Agricultural Credit (Stabilisation) Fund and the National Industrial Credit (Lone-term Operations) Fund during the year were Rs. 12 crorce, Rs. 8 crores and Rs. 25 crores, respectively, as against Rs. 16 crores, Rs. 9 crores and Rs. 10 crores, respectively, durimt 1966-67.

161. The rise of Rs. 7:80 crores in the income during 1967-68 was mainly due to increased earnings by way of discount on Treasury bills and interest on securities. The risr ol Rs. 2-80 crores in the expenditure was mainly under the head "Establishment", "Agency Charges" and "Security Printing.". The incraase under the head "Establish- mcni" was mainly due to payment of dearncss allowance at enhanced rates to "Award Staft" owing to the rise in the relevant Consumer Price Index Numbers, payment of salaries at the revised scale for the months of May and June 1968 to Class III Staff and increments granted to the stall in the time scales of pay. The increase under "Agency Charges" was due to payment of commission to the State Bank of India and its sub- sidiaries on larger turnover of Government transactions at their branches, while that under "Security Printing" was due to increase in the indents for note forms.

Auditors:

162. The accounts of the Bank have been audited by Messrs. S. B. BiUimoria & Co., of Bombay, Messrs. Brahmayya & Co., of Madras and Messrs. Ray & Ray, of Calcutta, who were appointed by the Government of India as auditors of the Reserve Bank of India for the year 1967-68 by notification No. F, 3 (61)-BC/67 dated September 27, 1967 issued in exercise of the powers conferred by Section 50 of the Reserve Bank of India Act.

Tin Central Board:

163. Dr. I. G. Patel was nominated as a Director of the Central Board in terms of Section 8(1) (d) of the Reserve Bank of India Act, 1934, with effect from January 16, 196b vice Shri S, Jaganhathan. Shri P. L. Tandon retired as Director from the Central Board of the Bank on the expiry of his term of office on January 14, 1968 but was. re-nominated by the Government of India as Director of the Central Board in terms of Section 8(1) (c) of the Reserve Bank of India Act, 1934. Dr. V. Shanmugasundaram was nominated as a Director of the Central Board of the Bank with effect from January 15, 1968 in terms of Section 8(l)(c) of the Reserve Bank of India Act, 1934. Sarvashri G. Basu, Arvind N. Mafatlal and J. Ramdave Row retired as directors from the Central Board on the expiry of their terms of office on June 30, 1968, but they were re-nominated by the Government of India as Directors of the Central Board in terms of Section 8(1) (c) of the Reserve Bank of India Act, 1934. The vacancy caused by the resignation of Dr. Tri'suna Sen was filled by the Government of India by nominating Shri Kamaljit Sinuh a\ a Director of the Central Board of the Bank with effect from June 25, 1968 in terms of Section 12(4) of the Reserve Bank of India Act. On the expiry of his term of office on June 30, 1968, Shri Kamaljit Singh was re-nominated for a period of four years by the Government of India as Director of the Central Board in terms of Section ,8(l)(c) of the Reserve Bank of India Act, 1934.

164. Shri K. Sreenivasan retired as Director of the Central Board of the Bank on the expiry of his term of office on January 14, 1968. The Board wishes to place on record its appreciation of the services rendered by Shri K. Sreenivasan.

165. Five meetings of the Central Board were held during the year, two of which were in Bombay and one each in Madras, Calcutta and New Delhi. The Committee of the Central Board held fifty-three meetings, of which three were held in New Delhi, two in Madras and the rest in Bombay.

Local Boards:

166. There was no change either in the composition or in the membership of the

Local Boards during the year under Report.

Opening and Closing of Offices and Changes in the Organisation and Management:

167. Offices of the Bank's Exchange Control Department wlh limited functions have been set up at Bangalore, Hyderabad, Jaipur, Nagpur and Patna with effect from April 7, 1968.

168. The Secretary's Section was reorganised with effect from July 1 1967 and w is .renamed as Secretary's Department. The Central Debt Section which Was under the •charge of the Secretary was transferred to the Department of Accounts and Expenditure -with effect from January 20, 1968.

Jiank's Premises:

A. Office Premises:

169. The construction of the Bank's new office building at Patna and the second phase of construction of the office building at Kanpur have since been completed. The Annexe to the proposed office building at Hyderabad is expected to be completed shortly, while the construction of the Annexe buildings at Bangalore and Madras is in progress. The tonstruction of the main office building at Bangalore and the Annexe buildings at Gauhaii and Nagpur is expected to commence shortly. Plans for a new office building in the compound of the India Government Mint, Bombay have been drawn up and the construc- tion is expected lo commence shortly.

B. Residential Quarters:

170. The construction of additional Officers' quarters at Alipore and the staff quarters at Sinehi Park, Calcutta have been completed. The Staff quarters at Rajendranagar, Patna are nearing completion. The construction of Staff quarters at Choolaimedu Road, Madras is in progress. The contract for the construction of Staff quarters at Bombay (ChembLir) has been awarded and the work will commence shortly. Additional Staff -quarters at Calcutta, Kanpur, Madras, New Delhi and Nagpur, as also the proposed Staff quarters at Bangalore are in the planning stage. Efforts are being made to secure suitable land for staff quarters at various centres.

C-Miscellaneous:

171. The construction of the Staff Training College and Hostel at Poona is nearing completion. The construction of additional floors over the Bankers' Training College, Bombay has been completed, while the work of the additional floor over the Hostel Block of the Staff Training College at Madras is in progress.

Employer-Employee Relations'-

172. The Arbitrator, Shri T. L. Venkatarama Aiyar, Retired Judge of the Supreme Court of India, gave his Award in respect of certain service conditions of workmen employees in Classes II and III in the Bank on February 12, 1968 and it was published in the Government of India Gazette Extraordinary [Part II—Section 3, Sub-Section (ii)J dated 5th March 1968. The Award has abolished the distinction between the existing two classes of Centres, viz., "Higher Pay Centres" and "Centres Other than Higher Pay Centres", for pay scales for different categories of staff and has prescribed uniform scales of pay for each category of employees at all centres. The revised basic pay has been fixed with reference to base year 1960 of Middle Class Index (All India Average Consumer Price Index Numbers for Urban Non-Manual Employees Base 1960=100) by merging a part of the dearness allowance. Payment of dearness allowance has been linked with the Middle Class Index with 90 per cent neutralisation when the pay is Rs. 500 or less and when it is above Rs. 500, at 90 per cent for the part upto Rs. 500 and at 75 per cent for the balance. The rates of Dearness Allowance are to be varied for every change of 4 points In the Middle Class Index calculated on a quarterly basis. Instead of the existing schemes of payment of family allowance at Rs, 10 per child with a maximum of Rs. 30 per month to employees with five years service, It is now admissible to all employees on completion of five years service, at 5 per cent of pay. The Arbitrator has also awarded certain improvements in the matter of medical aid, leave fare concession, etc. The revised scales of pay and allowances have been given retrospective effect from January 1, 1966. In all other respects, the provisions of the Award came into force from April 5, 1968.

Employees' Housing Loans Scheme:

173. Since the Introduction of the Bank's Housing Loans Scheme in 1961, an Increasingly large number of employees has been taking advantage of the loan facilities available to them uder the Reserve Bank of India Employees* Housing Loans Rules, 1960. Loans are granted upto 90 per cent of the total cost of land and construction of house or 42 months' pay or Rs. 50,000 whichever limit Is the lowest to employee-members of Co- operative Housing Societies formed by them and also to employees individually, referred to as "Society Loans" and "Individual Loans" respectively. The Scheme has become popular among all classes of employees and as at the end of June 1968 society loans have been sanctioned for an aggregate amount of Rs. 77,69,280 to 18 Co-operative Housing Societies consisting of 407 employee-members. Besides this, loans amounting to :Rs. 23,43,913 have been sanctioned to 131 employees individually.

RESERVE BANK OF INDIA

Balance Sh^et as at June 30, 1968.

S E C

.

3

( i l ) ]

ISSUE DFPAHTMENT

L I A B I L I T I ES

ASSETS

Rs. P.

Rs. P.

Gold Coin and Bullion :—

. 31,41,47,578-00

TJ-Jtesheid in the j i n k i ng Department

(a) Held in Ind a (&) Held outside I n da

T H E

Rs. P.

Rs. P.

G A Z E T T E

115,89,24,794-75

O F

I

Foreign Securities . . . .

TOTAL Notes in ;ircalation

Rupees Coin . . .. 206,4 [,99,950 • 11

N D

I

A

:

.322,31,24,744-86 74,69553,227-64

Government of Ind a Rupee Securities

Total N^ESS issued . . ..

330,05,46,484-50

3

2933,04,68,512-00

S E P T

.

Internal B Us of Excharge and

other Commercial Paper

2 8

,

Total Liabilities

Total Assets

1 9 6 8

/

A S V

I

N A

6

,

1 8 9 0

4 5 5 3

,

BANKING DEPARTMENT

4 5 5 4

LIABILITIES

A S S E TS

T H E

Rs. P.

Rs. p.

C a p i t al p a i d - up . ..

. 31,41,47,578-00

Notes

5,00,00,000 • oo ;

R e s e r ve F u nd . . . ..

1^73^73-00

Rupee Coin •

80,00,00,000 • OO !

G A Z E T T E

N a t i o n al A g r i c u l t u r al C r e d i t ( L oDg - T e nn O p e r a t i o n s)

35I I35 7 7 - 76

F u nd , . . . ..

143,00,00,000 • 00

Small Coin . . . . . .. Bills Purchased and Discounted .

O F

I

N a t i o n a l A g r i c u l m r al C r e d it ( S t a b i l i s a t i o n) F u nd

33,00,00,000 • 00

N D

I N a t i o n al I n d u s t r i al C r e d it ( L o n g - T e rm O p e r a t i o n s) F u nd

. 186,12,84,872-46

(a) Internal (by E x t e r n al (c) Government T r e a s u ry Bills . ..

5 5,00,00,000 • 00

A

:

• 107,53,31)072-38 . 252,52,09,122-40

Balances held Abroad* . . . .. I n v e s t m e n t s '* . . . . . ..

S E P T

.

D e p o s i ts :—

2 8

Loans and Advances to ;—

,

( a) G o v e r n m e nt

(t) Central Government . . ..

I 9 6 8

/

(0 C e a t r al G o v e r n m e nt . . ..

. 22,60,00,000-00

54,82,38,785-05

(if) State G o v e r n m e r t s@ . . ..

( ") S t a te G o v e r n m e n ts . . ..

Loans and Advances to :—

. 7,94,39,780-27

A S V T N A

00 Banks

6

(t) Scheduled Commercial Banksf

,

(i) Scheduled Commercial Backs

• 103,48,29,000-00 . 148,74,84,233-00 3>33,39,8oo-oo

I 5 O ) 5 3 > 4 I J 3 S 4 - 68

( H) State Co-operative Banksff ( j i t) O t h e rs

. . . . ..

1 8 9 0

Loans , Advances and InvestmentsfromNationalAgTi- (H) Scheduled State Co-operative Banks

10,72,07,452-12

culturalCredit(LoQg-Tenn Operations) Fund

[

(Hi) NoD-Scheduled State Co-operative Banks (w) Other Banks

82,32,797'*4

42,11,824-22

P A R T

(c) Others

389,59,65,274*78

(a)  Loans  and  Advances to :—
   (t)  State Governments                            31,69,15,471-46
    (ii)  State  G"voperative Banks                   16,46,76,526-61   I
                                                                        I
   (MI)  Central Land  Mortgage Banks                                   —

B i l ls P a y a b l e "! . - . • . . ..

(b) Investment in C e n t r a l L a n d M o r g a g e B a n );

. 16,92,38,496-17

S E C

.

Debentures

. . . ..

8,00,02,135-00

O t h er L i a b i l i t i es . . . ..

Loans & Advances from National Agricultural Credit

3

(Stabilisation) F u nd

( i i ) ]

6,14,33,418-00

Loans and Advances to State Co-operative Banks Loans Advances and Investments from National Industrial

C r e d i t ( L a n g - T e rm Operations) F u nd

T H E

6,08,92,344-00

O t h er Assets

(a) Loans and Advances to the Development Bank (6) Investment in bonds/debentures issued by the Development Bank . . .. . . . . . ..

62,26,39,009-51

G A Z E T T E

Total Liabilities

Total Assets

9 8 M M 9 7 3 33 58

O F

I

N D

I ContLngentliabllity on partly piid shares Rs. 8,99,992- 80 (Sterling Investments of £ 50,000 converted @ Rs. 100 = £ 5-5556), 'Includes Cash, Fixed Deposits and Short-term Securities. **(0 Excliding Investments from the National Agricultural Credit (Long-Term Operations) Fund and the National Industrial Credit (Lbng-Term A

:

Operations) Fund.

S E P T

.

(it) Includes £ 50,000 and U.S. $ 1,992,500 held abroad. .^Excluding Loans and Advances from the Natioaal Agricultural Credit(Long-Term Operations) Fred. •(•Includes Rs. 67,00,54,000-00 advanced to scheduled commercial banks against usance bills under Section I7(4)(e) of the Reserve Bank of India Act. ff-ExcJuding Loans and Advances from the Niticnal Agric iltJral Credit (L?Jg-Terrn Operations) Fund and the National Agricultural Credit (Stabilisa- 2 8 tion.) Fund-

,

G. BALASUBRAMAKIAK

1 9 6 8 Chief Accountant

/

Dated, the 23rd July, 1968.

A S V

I

L. K. JHA, Governor B. N. ADARKAK, Deputy Governor A. BAKSI, Deputy Governor J. J. ANJARIA, Deputy Governor P. N". DAMRY Dejiutj' Governor

N A

6

,

1 8 9 0

4 5 5 5

PROFIT AND Lo-i Ac.oo-T

5

FOR THE YEAR ENDED

June 30, 1968

Jpjr.e, 30, 1967

June 30, 1966

N

Rs. P.

Rs. P.

Rs. 1\

INCOME

ra

92,92,11,671-89

I n t e r e s t, DLSCOUTT, E x c h a r g e, C o a i t n i s s i o r, t t c .| . . . .

85,12,17,798-63

67=52=54=5°2-47

E X P E N D I T U RE

. . . . . . . ..

. . . . . . . ..

11,74,52,581 32 66,839-23 30,000 • 00 64,70,307-75 i363=239-37 9,61,938-76

10,24,0-3,952-84 67,605-07 30,0-00 • 00 58,19,576-85 14,703-45 3,5³>37 7-65

to '. 00

H-" vo 00

. . . . . ..

E s t a b l i s h m e nt D i r e c t o r s' a nd L o c al B a o rd M e m b e r s' F e es a nd E x p e n s es A u d i t o r s' F e es . . . . . . . .. R e n t, T a x e s, I ns i r a n c e, L i g h t i n g, e t c. L aw C h a r g es P o s t a ge a nd T e l e g r a ph C h a r g es R e m i t t a n ce of T r e a s u re . . . . . .. S t a t i o n e r y, e t c. . . . . . . . .. S e c ' i r i tv P r i n t i ng ( C h e q u e, N o te F o r m s, e t c .) D e p r e c i a t i on a n d ' R e p a i rs to B a nk P r o p e r ly A g e n cy C h a r g es CovHrib i t i o ns to Staff a nd S u p e r a n n u a t i on F u n ds

M i s c e l l a n e o us E x p e i ^ s es

. . . . . ..

S,94=25,875-37 71,490-87 30=000-00 40,45,684-58 48,332-67 7,76,425-43 44,61,09857 20,27,981-10 3,94,18,29990 49,01,584-56 2,60,72,804-94 7,32,000-00 32,42,547-34

44,26,0^0-95 16,15,83006 4,65,24,897-71 68,61,357-31 7=83=59=733-25 7,32,000-00 35=I3=774'5°

42,17,52630 T5397,976-97 5,00,13,904-09 69,08,487-84 8,65,30=376-36 7,32,000-00 40,66,14579 65,00,00,348-11

: >

60,00,00,903-98 Net Available Balance

50,00,00,377.14

92,92,11,671 89

Total

85,12,17,798,63

*7,S2>54,5<>2-47

s

o

S ' O r p l Js p a y a b le to t he C e n t r al G o v e r n m e nt

. ..

65,00,00,348-11

60,00,00,903 • 98

50,00,00,377-14

if

Reserve Fund Account

S E C

.

3

80,00,003000 • 00

By Balance on 30th June) 1968

( i i ) J

Nil

By transfer from Profit and Loss Account

T H E

80,00,00,000'oe

Total

+After making usual or necessary provisions in terms of Section 47 of the Reserve Bank of India. Act.

G, BALASDBEAMANIAN

G A Z E T T E

Chief Accountant

O F

I

L. K. JHA, B. N. ADARKARJ A. BAKSL, J. J. ANJARIA, P. N. DAMHY,

Governor Deputy Governor. Deputy Governor. Deputy Governor. Deputy Governor.

N D

I

REPORT OF THE AUDITORS

A

:

TO T HE PRESIDENT OF INDIA,

^Pe the undersigned Auditors of the Reserve Bank of India, do hereby report to the Central Government upon the Balance Sheet and Accounts of the

S E P T

.

Bank as at 30th June, 1968.

2 8

,

1 9 6 8

/

A S V

I me have examined the above Balance Sheet with the Accounts, Certificates and Vouchers relating thereto of the Central Office and of the Offices at Calcutta Bombay and Madras and with the Returns submitted and certified by the Managers of the other Offices and Branches, which Returns are incorporated ^ tw above Balance Sheet, and report that where we have called for explanations and information from the Central Board such information and explanations have been given and have been satisfactory. In our opinion, the Balance Sheet is a fuU and fair Balance Sheet containing the particulars prescribed by and in hich the assets have been valued in accordance with the Reserve Bank of India Act, 1934 and the Regulations framed thereunder and is property drawn up Inaa to exhibit a true and correct view of the state of the Bank's affairs according to the best of our information and the explanations given to us, and as Sown by the Books of the Bank.

N A Bated tht 2$rd July, 1968, ^^' *

6

,

S. B. BUXIMORIA & 00., "1 BRAHMAYYA & CO., >Auditors RAY & RAY J

— 1

[No. F.3(57)-BC/68.]

1 8 9 0

D. N. GHOSH, Dy. Secy.

4 <

;

" 7

4 5 5 8

(Department of Economic Afftira)

New Delhi, the 20th September 1968

S.O. 5443-— Statement of the Affairs of tha Reserve Bank of India, ag on the 13th September. 1968

BANKING DEPARTMENT

ASSETS

RL

Rs.

L I A B I L I T I ES

S,O(M)0y0OO

Notes

Capiwl Paid Up . ..

. . 25,92 42,000

T H E G A Z E T T E

Rupee Coin . ..

. .

4,74,000

O F

I

4,28,000

Peserre Fund

Sn-sti Coin -

. .

N D

I

Bills Purchased acd Discounted :—

A

:

National Agricultural Credit (Long T e rm Opentions) Fund . .

(a) Tnte-na!

(fr) External . - , .

S E P T

.

(c) GortsBmstit Tre"snry Bills

J68J3O,47,OCO

NflrionaJ Affricnttnral Citfit

2 8

, (Stabilisation) Fnnd

33/x>,oo^)oo

115,72,18,000

Balancoi HekJ Afcro 'd* .

,

1 9 6 8

55,00,00,000

National Industrial Credit (Long T e rm Operations) Fund . ..

Iirrettments*'

271,04,63^00

/

A S V

Lotn* snd Advsnccs to 1 -

I

(0 Central Goveinrrent

N A

6

(£} Stite GoremmentB@ . . ..

23,93.31.000

,

Deposits—

Loans t nd Adr*ncei to s —

1 8 9 0

[I) Scheduled Commenajl Banisf

91,62,75030

[

186,47,24,000 (0) Goverrmeot—

(*0 State C o - o p e r a t i" Bankrft .

f "0 Others

. . . ..

P A R T I I

4,83,42*000

83j74.6°5""

(0 C e n t nl Government

—

S

t

Lotni, Adwrx"ai*i Investment* from National Agricultural

e

'

Credit (Long Term Operation*) Fund—

3

(

H

13,47^86,000 (a) Loans "nd Advances to i —

(IF) State Governments

j ]

(0 State Governments .

31,68,13^*5

T H

(ti) State Co-operative Banks . , , .

15,57,89^)03

f i

••

(i*ii) Centra] Land Mortgage Banks

(i) Investment in Central Land Mortgage Bani

8,53,61,000

Debentures . . . . - •.

G A Z E T T E

Loans and Advance* from National Agricultural Credit

(Stabilisation) F u n d-

(0 Scheduled Commercial Banks

O F

I

5,71,79,000

Loans and Advances to State Co-operative Banks

7,17,48,000

(ii) Schedufed State Co-operative Baoki

N D (.iff) Non-Scheduled State Co-operative Bank*

66,86^co

I

A

:

(") Other Bank* . . .

Loans, Advances aad Investments from Natiooa! Indaftrial

14,02,000

Credit (Long 7 enn Operations) Fu>xi—

(a) Loans and Advances to the Development Bank

(c) Others

6^)8,92,000

327,24 viS.ooo

S E P T

.

(b) Investment in bonds/debenttres iasned by the

2 8 Bills payabfc

Derrelopment Bank

,

18,32,71,000

34,41,45,000 Other T.inhtHH^

28,81,56,000 Othet Asaets

1 9 6 8

/

Rupees

939,97^3^>oo

939,97,23^100

Rupees

A S V

I

N A •Includes Cash, Fixed Deposits and Short-term Securttiee. ••Excluding Investments from the National Agricultural Credk (Long Term Operations) Fund and the National Industrial Credit (Long Term

6

, Operations) Fund.

@ Exctoding Loans and Advances from the National Agricultural Credit (Lon^ Term Operations) Fond, but including temporary over-drafts to

1 8 9 0 State Governments.

tlnelodes Rs. 59,30,88,000 advanced to scheduled commercial banks against usance bills under Section 17(4X0 of the Reserve Bank of India Act.

EftExduding Loans and Advances from the National Agricultural Credit (Long Term Operations) Fuad and the National Agricultural Credit (Stabili-

sation) Fund

Dated the 18th day of September, 1968.

4 5 5 9

An Account pursuant to die Reserve Bank of India Act, 1934. f" the week ended the 131*1 day of September, 1968

4 5 6 0

Isstn DEPARTMENT

A S S E TS

Rs.

Rs.

Rs.

Rs.

LIABILITIES

G o ld C o in a nd B u l l i o n :—

Notes held in the Banking Depart-

T H E

(a) H eM in India. . . ..

ment

(S) H e ld outside I n d ia .

Notes in circulation .

25>92J42>°⁰⁰ 32,32,17,96^00

G A Z E T T E

206,42,00,000

3258,10,38,000

Foreign Securities . . ..

Total Notes issued . . " .

T O T AL

O F

I

322,31,25,000 N D

I

A

:

82.74^45,000 2853,O4,68/x"

R u p ee C o in G o v e r n m e nt of I n d ia R u p ee Securities Internal Bills of E x c h a n ge a nd other

commercial p a p er

S E P T

.

3258=10,38,000

T o t al Assets . . ..

3258,10,38,000

Totml I i i b 2 m" . .

P"ted the 18th day of September, 1968.

2 8

,

1 9 6 8

/ B- N- ADARZAR, Dy, Goyemor-

[No. F. 3(3)-BC/68.]

A S V

I

V- Sw3minathan3 Under Secy. N A

6

,

1 3 9 0

f f

a a

I t

—

(Stock Exchange Division)

New Delhi, the 1th September 1968

S.O. 3444.—The Central Government having considered the application for renewal of .recognition made under section 3 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) by the Hyderabad Stock Exchange Limited, Hyderabad, and being satisfied that it would bo in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section 4 of the said Act, recognition to the said Exchange under the said section 4 for a further period of five years commencing from the 29th September, 1968 and ending with the 28th September, 1973, in respect of contracts in securities subject to the condition stated herein below and such other conditions as may bo prescribed or imposed hereafter.

Condition

Dealings shall not bo permitted on the Exchange except for spot delivery and for delivery

[No. F. 1|6|SE|68J

S. S. SHIRALKAR, Addl. Secy.

(Department of Revenue and Insurance)

CUSTOMS New Delhi, the 21st September 1968

S.O. 344<>-— In exercise of the powers conferred by section 6 of the Customs Act, 1962 (52 of 1962) the Central Government hereby entrusts to the officers mentioned in column (1) of the Table below, the functions of an Officer of Customs specified in the Corresponding cntiy in column (2) of the said Table.

TABLE

Officers

Functions under the provisions of

the Customs act, 1962

( i)

( 2)

. Revenue Inspectors of

I

(i) Agalti,

(ii) Kalpeni and (.lit) Cbetlat Islands

2 Sub-Inspector of Police of Chctlat Island

Sections 92, 93, 94, 95, 97, and

. 98.

. Head Constables of (0 Agatti,

3

(ii) Kalpcni, (tii) Kadmat and (jv) Kiltan Islands

J

[No. 130/F. No. 6/1/68-LCIL].

STAMPS

Delhi, the 28th September, 1968

S.O. 3447.—In exercise of the powers conferred by clause (a) of sub-section (1) of section 9 of the Indu-n Stump Act, 1899 (2 of 1899), the Central. Government hereby remits the stamp duty chargeable under the said Act on receipts exceeding twenty rupees furnished by persons affected by the Koyna earthquake in the State of Maharashtra in respect of amount rcce vtd by them either as loans under the Non-Agricultural Loans Act of the State of Maharashtra or as subsidies.

[No. 16/68-F. No. 1/44/68-Cus.VII/SUmpt.J- M. S, SUBRAMANYAM, Under Secy.

(Department of Revenue and Insurance)

New Delhi, the 21st September 1968

SO. 3448.—In exercise of (he powers conferred by sub-clause (iii) of clause (44) of Section 2 of the Income-tax Act, 1961 (43 of 1961) tho Central Government hereby authorises

1. Shri S. S. Mehta, 2. Shri K. K. Tiwari and 3. Shri B. K. Ujwal.

Who are Gazetted officers of the Central Government, to exercise the powers of Tax Recovery Officers under the said Act.

2. Thh notification shall come into force on the 21st day of September, 1968.

[No. 86 (F. No. 16/14/68-1TA I OJ

J. C. KALRA,

Secretary, Central Board of Direct Taxe*.

CENTRAL BOARD OF DIRECT TAXES

INCOME-TAX New Delhi, the 11th September 1968

S.O. 3449.—In exercise of the powers conferred by sub-section (I) of section 122 of the Income-tax Act, 1961 (43 of 1961) and of all other powers enabling it in that behalf the Central Board of Direct Taxes hereby makes the following amendments in the Schedule appended to its notification No. 51 (F. No. 50/12/6(4-117), dated the 5th June, 1968, namely:—

In the said schedule against J-Range, New Delhi under column 2 the following shall be added :^

J-Ranga, New Delhi. 3. Distt. II Wards E. & F.

4. Special Circle V

Explanatory Note.

The amendment has become necessary on account of the creation of Special Circle V, Ward U and Ward F of. Diatt. II.

(The above note does not form a part of the notification but is intended to be merely clarificatory).

[No. 82 (F. No- 50/12/68-ITJ-] S.O. 3450.—In exercise of the powers conferred by sub-section (I) of Section 122 of the Income-tax Act. 1961 (43 of 1961) and of all other powers enabling it in that behalf, the Central Board of Direct Taxes hereby makes tbc following amendments hi the Schedule appended to its Notification No. 166 (F. No. 50/138/67-ITJ), date'd the 30th December, 1967 namely:—

In the said schedule against 'B' Range, Madras under Column 2, the following shall be substituted, namely:—

'B' Range, Madras. 1. Salaries Circle, Madras.

2. Salaries Circle I, Madras. 3. Salaries Circle II, Madras, 4. Special Survey Circle (all Sections), Madras, 5. Special Investigation Circle 'A', Madras. 6. Special Investigation Circle 'B\ Madras. 7. Tax Recovery Circle, Madras. 8. Central Circles I to XVII, Madras.

This notification shall take effect from the 16th September. 1968.

EXPLANATORY NOTE.

The amendments have become necessary on account of creation of new Central Circles XI to XVII at Madras.

(The above note does not form a part of the notification but is intended to be merely clarificatory).

[No. 83 (F. No. 50/2/68-ITJ),] S. V. SUBBA RAO, Under Secy.

INCOME-TAX New Delhi, the 16th September 1960

S.O. 3451.—In exercise of the powers conferred by sub-section (1) of Section 121 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following amendments to the Schedule appended to its Notification No- 20, (F. No- 55/1/62-1T) dated the 30lh April, 1963 published as S.O. 1293 on pages 1454—1457 of the Gazette of India Part II Section 3 sub-section (ii) dated the 11th May, 1963 as amended from time to time:—

Against S. No. 9A, Ma'dras (Central), Madras, under column 3 of the Schedule appended thereto, substitute the following for the existing entries:—

1. Central Circles I to XVII, Madras. 2. Central Circles 1 and II. Coirnbatore. 3. Central Circles I and II, Bangalore- 4. Central Circle, Ernakulam. 5. Central Circle, Hyderabad.

This notification shall come into force with effect from the 16th September, 1968.

[No. 84 F. No. 55/324/68-ITA III.] N. SRIRAMAMURTY, Under Secy.

POONA CENTRAL EXCISE COLLECTORATE

ENTRAL EXCISES

Poona, the 12th September, 1968,

S.O.345*—In exercise of the powers conferred on rns by rule 173-0(1) of the Central Excise Rules, 1944, an.din supersession of Poona C:ntral Excise Coliectorate Notification No. CER/5/68, dated the 17th July, 196811 hereby prescribe a form of Price List, which shall be filed in quadru- plicate by every assessee who produces, manufactures or warehouses excisable goods to which the provisions of Chapter VII-A of the Central Excise Rules, 1944 apply and which are chargeable with duty at a rate depending on the value of the goods, with the Supjrintendent of Central Excise having jurisdiction over his factory or warehouse, well in advance before such goods are removed for, or put to, homo use, for approval by the said officer.

If in the list approved by the proprr officer, there is any alteration or modification in the prices or change in the mode of sale from the stage of clearance from the factory to the wholesale dealers/ consumers, he shall file a fresh list in the prescribed form in quadruplicate or communicate an amendment to the list already riled and approved by the proper officer well before giving effect to such alteration, modification or change in the mode of sale.

Portn of Price List

Price list of M/s

holder of L 4 No In respect of Omwition here name of excisable goods).

Full description of excisable goods

Unit of Sale

Quantity or No. packed in such unit Serial No.

1

3

3

4

Price charged by the manufacturer to the wholesale dealers or consumers if there is a direct sale.

Price per Unit Discount allowed if any, and conditions

Details of taxes including C. ex. duty if any, included in the price

6

5

7

.Price charged by the manufacturer to the sole distributors, sole selling agents or authorised stockists.

Discount allowed if any and conditions

Price charged per

unit

Name of distributor/sole selling agent/ authorised stockists

10

8

9

Details of taxes including Central Excise duty if any3 included In the price.

II

"Price charged by the sole distributors. Sole selling agents 01 authorised stockists to the wholesale dealers or to the consumers.

Discount Bllowed

.Price charged per unit

Details of taxes including C Ex. duty, if if any and conditions any, included in the price

12

13

Assessable value Full derails of the channel of marketing the goods from Remarks the stage of clearance of goods from the factory lo I he wholesale dealers or consumers and the conditions oi' agreement if any

16

17

I/W'j certify thai the information given above is true and correct in all respects.

Sign attire of Ihe manufacturer Or his

authorised agent.

NOTE.—Separate price list should be filed for each excisable commodity manufactured in the- factory and aosessat.le to duty 'ad valorem,, If the goods are assessed to duty under different s u b- items of ihc main TarilT item, separate sections for goods assessable to duty under different sub- iterns should be opened in the price list.

[No. CER/7/68.]

D. N. LAL Collector

MINISTttY OF INDUSTRIAL DEVELOPMENT AND COMPANY AFFAIRS

(Department of Industrial Development)

(Indian Standards Institution)

New Delhi, the 4th September 1968

S.O. 3453 In pursuance of sub-regulations (2) and (3) of regulation 3 of the Indian Standards Institution (Certification Marks) Regulations, 1955, the Indian Standards Institution hereby notifies that the Indian Standards, particulars of which are given in the Schedule here- to annexed, have been established during the period r to 31 August 1968 :

THE SCHEDULE

No. and Title of the Indian

Standard Established SI. No.

Brief Particulars

No. and title of the Indian. Standard or Standards, if any, superseded by the new Indian Standard

( 1)

( 2)

1 IS: 814-T967 Specification for covered electrodes for metal arc welding of mild sieel. (secoiid revision).

(4)

(3)

IS: 814-1963 Specifica- tion for covered elec- trodes for metal arc welding of mild steel (Revised.)

2

This specification lays down requirements for covered electrodes of sizes 1 mm and above for metal arc welding (by hand opera- tion) of mild steel con- forming to IS: 226-1962, IS : 2062-1962 or IS : 1977-1962. (Price Rs. 8-00).

IS: 1363-1960 Specifica- tion for black hexago- nal bolts (6 to 39 mm) with nuts and black hexagonal screws (6 to 24 mm).

IS: 1363-1967 Specification for black hsxagon bolts, nuts and lock nuts (diameter 6 to 39 mm and black hexagon screws (dnmarer 6 to 24 mm). (first revision).

3

This standard covers the requirements of black hexagon bolts, nuts and lock nuts in the diameter range 6 lo 39 mm and black hexagon screws in the diameter range 6 to 24 mm. (Price Rs. 4-00).

["his standard prescribes the

IS: r483-i959 Specifics- 1 tion for white bread.

IS: I4S!3-T95S Specification for . white hroiid.

(Jirst revision).

IS: 2T>A-l?5i Sr>;:i(lcrition for 4

cvim jiw snaiiTiers. (jirst revision).

requirements and the • methods of rest for white • bread. (Price Rs. 5-50).

IS: 2028-1962 Specifica- ' tion for open jaw spanners.

5

rhis standard covers the requirements for forged, open jaw spanners of single and double-ended typ-9 for general purposes, and the double-ended higher torque spanner* used in the automobile industry. (Price Rs. 5-00).

IS : £-2300-1963 Speci- fication for non-metal helmets for civil defence.

IS: 2300-1958 Specification for non-metal helmets for civil defence (first revision).

This standard lays down the requirements regarding materials, constmctiont workmanship and finish, weight and performance: tests of helmets for civil defence requirements. The helmets covered by this standard are intended to provide protection mainly against debris and to some extent against ahrap- - nels and fire. (Price Ra. 5-5°).

C4)

(3)

6 IS: 2548-1967 Specification for plastic water-closet scats and covers (second revision).

IS : E2548-1966 Speci- cation for plastic water- closet seats and covers (Revised).

7 IS: 4410 (Part IV)-i9^7 Glossary of terms relating to river valley projects, Part IV drawings.

.8 18:4512-1967 Specification for ootwear lasts, wooden.

-9 IS: 4561 (Part rVO-1968 Speci- fication for oil cans, Part IV detachable spout oil cariB.

30 IS : 4567-1968 Specification for pliera terminal device, quick- grip, for artificial limbs.

i ll IS: 4570-1968 Specification for crystal holders.

.12 IS: 4583-1968 Specification for plate snap gauges.

This standard covers the requirements regarding material, manufacture, di- mensions, finish and testing of plastic seats and covers for use with water closets. (Price Rs. 4-00).

This standard contains defi- nitions of terms relating to lines, scales, types of draw- ings, sections, projections, perspectives, chartB, dia- grams and maps, comm- only used in river valley projects. (Price Rs.6'oo).

This standard specifies the requirements, methods of sampling and test for wooden lasts for manufac- ture of footwear as are used in the Indian footwear and last-making trade and industry. (PriceRs. n-co)

ThiB standard specifies the requirements for detach- able spout oil cans for general purposes. (Price Rs. 2-50).

This standard specified the requirements pertaining to materials, shape, dimensions, manufacture, workmanship, finish and performance for quick, grip pliers terminal device (Price Rs. 2-00).

This standard covers the dimension and the per- formance requirements as well as the tests for judging the electrical mechanical, and climatic properties of crystal holders intended for use in electronic and telecommunication equip- ment. (Price Rs. 8-50).

This standard specifics shapes and overall dimensions of plate snap gauges in the size range over 2 to 250 mm of both double-ended and single-ended pro- gressive types, double- ended type plate snap gauges have been specified in the size range over 2 to 100 mm and single- ended progressive typo plate snap gaugeB in the size range over 100 to 250 mm. (Price Rs. 3 • 50).

( I)

(4)

(3)

CO

IS: 4585-1968 Specification for

13

football boots.

This standard prescribes the requirements, methods of sampling and test for football boots with, leather sole and leath er studs or bars, and fitted with hard as well . as- soft-toes.

(Price Rs. 4-00).

14 IS: 4597-196S Code of practice for finishing of wood and wood based products with nitrocellulose and cold cata- lysed materials.

This standard deals with the- finishing of wood and wood based products using: nitrocellulose based mate- rials and cold catalysed, materials.

(Price Rs. 2-50).

15 IS: 4598-1968 Mothod for simple bend teat for aluminium and aluminium alloy sheet and strip of thickness between 0 • 3 mm and 7mm.

This standard prescribes the¹ method of conducting" simple bend test on alu- minium and aluminium alloy sheet and strip of thickness between o-z mm and 7 mm. (Price Rs. 2ico).

16 IS: 4632-1968 General require- ments and testing of lifeboats for less than one hundred persons.

This standard gives the- general requirements and tests for lifeboats with, carrying capacity lessrthan. 100 persons. (Price Rs. 5-50).

IS: 4612-1968 Specification for

17

C-hook terminal device, spring- loaded, for artificial limbs.

This standard specifies the- requirements pertaining-, to material, shape dimen- sions, workmanship, finish and performance of" spring-loaded C-hook. terminal device.

(Price Rs. 2'oo)

18 IS: 4618-1968 Grading for castor seeds for oil milling.

This standard prescribes the methods of grading and the requirements for castor seeds for oil milling,, along with the relevant methods of sampling and', test.

(Price Rs. 2-co).

IS: 4640-1968 Method for

designating netting yarns in the tex system.

This standard prescribes the manner of designating netting yarns by the: use of their linear density or of their resultant linear density expressed to tex. (price Rs. 1*50).

[No. CMD/i3:2.1

4 5 7 °

THE SCHEDULE

Period of Validity

Name and Address of the Licensee

Serial No.

Licence No. and dale

Article/Process covered by the licence and the

T H E Fro a

—

Relevant Indian Standard No. To

.

(i)

(2)

(3)

—

(4)

(5)

(6)

i

1-4-6S

31-3-69

CM/L-26 21-3-1957

H ^- Carew & Co. Ltd., Rosa, Distt.,

G A Z E T T E

Rectified spirit, grade I—IS: 323-1959

Shah] ahanpur.

2

16-7-68

O F 15-7-69

CM/L-29 r - 7 - i9 57

M/s. Tata Fisoa Industries Ltd., Union Bank

D DT water dispersible powder concentrates—

I

Building, Dalai Street, Fort, Bombay-i

IS: 565-195S

N D 3

1-7-68 30-6-69

I

M/s. E.I.D. Parry Ltd., DareHouse.Madras-i

BHC dusting powdere—IS: 561-1962

A

:

4

1-7-6S 30-6-69

CM/L-131 24-6-1959 CM/L-132 24-6-1959.

M/s. E.I.D. Party Ltd., Dare House, Madras-i

DDT dusting powders—IS: 564-1961

S E P T 5

.

1-8-68 31-7-69

CM/L-IS7 23-12-1959

(a) VIR Cables for Fixed Voliage Grade Conductor

2 8

,

M/s. Shamsher Sterling Cable Corpn. Ltd., Vas- waiu Mansions, Dinsha Wacha Road ' Bombay-1

Wirivg. CO TRS (tough rubber 250/440 volts "|

sheathed)

1 9 6 8

/

(it) Braided & com- 250/440 and j Copper

pounded 650/1 100 volts J-or alu- A S V T N A

C"0 Weather proof 250/440 and [ minium ,. , _ 650/1 100 volts (w) Flame retarding 250/440 volts J (6) VIR Flexible Cords

6

,

(0) Twisted and 250/440 Volts Copper

1 8 9 0

[

circular artificial only silk or ?lace cotton brai- ded,

(d) TRS (Tough 250/440 Volts Copper

rubber sheathed) only

P A R T

IS =434 (Parts I& II)-

1964.

D —

6

16-7-68

M/s.Mysore Insecticides Co. Pvt. Ltd., Andhra 1

15-7-69

3riC drstingpo\vders—IS: 561-1962.

CM/L-169' 22-2-1960

T S B C

.

Bank Building, 6 Linghi Chettv Street, Madras-i.

3

1-8-68 31-7-69 The Renown Biscuit Co., Conna-l^ht Road, Near I

7

biscuits (excluding wafer biscuits) of the following

( i i ) l CM/L-207 20-7-1960

Victoria Garde as, Bombay-27

varieties :

T H E

Golf, Royal Assorted , Flower, Custard Cream, Shrewsbury, Glucose, Disgestive, Nice, Patit Beurree, Marie, Thin Arrowroot, Saltine Khara, Saltine (Square), Cream Craker— IS: 1011-1957

S

1-7-68

M/s. Sonawala Industries Pvt. L t d, 137 Sheikh !

30-6-69^

sulphuric acid, battery, pure and analytical regent CM/L-312 26-6-1961

Memon Street, Bombay-2

grades—IS: 266-1961

G A Z E T T E

1-8-68

M/s. India Plywood Company^ S.K.DevRoad '

9

Pea-chest plywood panels—IS: 10-1964 31-7-69

CM/L-327 31-7-1961

Pattipookar (Dum Dum), Clacutta-28

O F

I 10

M/s. Abrol Engineering Co. Circular Road,

1-8-68

Metal clad switches, 15 amp. 250 volts, with HC 31-7-69

CM/L-374 11-1-1962

Kapurthala

N D

I

and MEM types fuse bases and carriers—IS : 1567-1960

A

:

11

16-6-68

The Tata Iron & Steel Company Limited, Jam-

15-6-71

Structural steel (standard quality)—IS: 226-1962

shedpur, Singhbhum District, Bihar

CM/L-421 30-5-1962

S E P T

.

12

The Tata Iron & Steel Company Limited, Jam-

16-6-68

Galavanized steel sheets, (plain and corrugated)—

15-6-71

CM/L-422 30-5-1962

shedpur, Singhbhum District, Bihar

IS: 277-1962

2 8

,

16-7-68

BrIC wat:r dispersible powder concentrates— IS:

15-7-69

13 CM/L-429 30-6-1962

562-1962

1 9 6 8

/

The Hindustan Mineral Products Co. Prt. Ltd., 27 Manganese Depot, Sewri, Bombay-15 having their office at 111 Industrial Area, Sion, Bombay-2 2

A S V

I

1-8-68

14

F3W-69

Covered electrodes for metal are welding of mild steel of normal penetration type—IS: 814-1963 CM/L-431 1S-7-1962.

N A

6

,

M/s. Indian Oxygen Ltd., Electrode Factory, Barrackpore Trunk Road, Khardah, 24 Par- ganas having their Regd. Office at 48/1 Dia- mond Harbour Road, CaIcutta-27

Tea-chest metal fittings—IS: 10-1964 31-7-69

1-8-68

15

1 8 9 0 CMfL-503 24-1-1963

M/s. B. D. Khetan & Co., 29, Colootola Street, Calcutta having their office at 5, Clive Row, Calcutta-i

16

M/s.NewChemi MineralMills Pvt.Ltd.Chakra-

16-7-68 15-7-69

BHC dusting powders—IS: 561-1962 CM/L-551 25-6-1963

vatiAshokaRoad,IndustrialEstate, Kandivlee CEast), Bombay-67 having their Head Office at 7A, Dean Lane, Fort, Bombay-i

4 3 ^ 1

" " * _

( I)

(6)

(4)

(3)

( 2)

(5)

15-7-69 M/s. Bharat Pulverising Mills (Pvt) Ltd., 38A, BHC emulsifiable concentrates^—IS: 632-1966.

CM/L-552

16-7-68

Sayani Road, Bombay-28.

25-6-1963

15-7-69

IS

16-7-68

T H E

M/s. Mahendra Electricals Limited, Karala Mission Road, Nadiad (Gujarat State).

CM/L-553 25-6-1963.

(1) PVC insulated cables, sheathed and unsheathed, 250/440 and 650/1 ico volts with copper or aluminium conductors;—IS: 694 (Part I)—1964.

and

(2) PVC insulated flexible cords, 250/440 volts

with copper conductors only—IS: 694 (Part H

—1964.

G A Z E T T E

M/s. Annapurna Pulverising Mills, Industrial BHC dusting powders—IS: 561—1962. 16-7-68 15-7-69

19

O F

Estate, Eluni (W.G. Di3tt.) AJ>.

CM/L-554 26-6-1963

I

15-7-69 The Indian Aluminium Cables Ltd., 12th Mile-

16-7-68

30

N D

I CM/L-555 26-6-1963

A

Hard-drawn stranded aluminium and steel-cored aluminium conductors for overhead power trans- mission purposes—IS: 398—'I961.

:

stone, Delhi-Mathura Road, Faridabad (Haryana) having their Regd. Office at F-40 NDSE (Part I) New Delhi-3.

M/s. Power Cables Private Ltd., Vithahvadi

1-7-68 30-6-69

21

S E P T

.

CM/L-557 2-7-1963

Hard-drawn stranded aluminium and sted-cored aluminium conductors for overhead power trans- mission purposes—IS: 398—'I961.

2 8

,

(Near Vithalwadi RIy. Stn.) Post Box No. 4, Kalyan haricg their office at 5-B, Aniar Bldg., Sir P. M. Rd., Bombay-i.

1-8-68

22

31-7-69

1 9 6 8

/

Bitumen felts for waterproofing and damp-proofing t type 3, grades 1 and 2; and type 2 grade 2—IS CM/L-561 11-7-1963.

1322—1965.

M/s. Lloyd Bitumen Products Pvt. Ltd., 1 Tara- tola Road, Cabutta-53 haying their office a 4A, Royd Street, Calcutta-16.

A S V

I

BHC water dispersible powder concentrates —

M/s. Annapurna Pulverising Mills, Industrial

31-7-69

1-8-66

23

IS: 562—1962.

Estate, Huru,W.G.Distt (A.P.)

CM/L-562 11-7-1963

N A

6

,

Structural steel (standard quality)—IS: 226—1962. 1-7-68 30-6-69

24

M/s. National Rolling & Steel Ropes Ltd., Nicoo • House, 1 & 2 Hare Street, Calcutta.

CM/L-685 17-6-1964

1 8 9 0

Structural stee] (ordinary quality)—IS: 1977—1962.

M/s. National Rolling & Steel Ropes Ltd.,

1-7-68 30-6-69

[

Nicoo House, 1 & 2 Hare Street, Calcutta.

CM/L-686 17-6-1964

16-7-68 15-7-69

F A R T CMfL-696 17-6-1964

The National Insulated Cable Co. of India Ltd., Shamnagar (24 Parganas), West Bengal having their Regd. Office at Nicoo House, 2, Hare Street, Catcotta-l,

PVC insulated (heavy duty) electric cables for work- ing voltages up to and including 1 100 volts (with aluminium or copper conductors)—IS: 1554 (Par; I)—1964

I I -

t-S-68

M/s. Madras Electrical Conductors Pvt. Ltd.,

31-7-69

27

S E c CM/L-697 25-6-1964

37) Arcot Road, Madras -26.

:

r

5

Hard-drawn stranded ahiminrum nnd steel cored aluminium conductors for overhead power trans- mission purposes—IS: 398-1961.

( i i

M 28

16-7-68 15-7-69 M/s. Allied Industries, HawaSarak, Jaipur South,

CM/L-698 25-6-1964

Jaipur (Rajasthan").

t t i

I2"5andl5 litres capacity cast iron flushing cisterns for wateT closets and urinals (bell type) high level IS: 774-I964-

E

16-T-68

The Bombay Oil Industries Private Ltd., Agra

[15-7-69

Stearic acid, technical, grade 3- I S: l£75-i$fc.

29 CM/L-699 25-6-1964

Road, Bhandup, having their office at lOmmoor House, 281/S7, NarsiNatha Street, Bombay-9.

O X Z E T

t t

30

1-8-68 31-7-69 M/s.CalcuttaSteelCo.Ltd.,4Old CourtHouse Structural steel (standard quality)—IS: 226-1962.

CM/L-702 29-6-1964

Street, Calcutta.

O F

1-8-68

M/s. Calcutta Steel Co. Ltd-, 4 Old Court House !

Structural steel (ordinary quality)—IS: 1977-1962. 31-7-69

31

I

Street, Calcutta.

CM/L-703 29-6-1964

N D

I

The Eagle Rolling Mills Ltd., Kumardhubi, Structural steel (standard quality)—IS: 226-1962 .

1-8-68

32

31-7-69

A

:

CM/L-704 29-6-1964

District Dhanbad, Bihar.

1-8-68

The Eagle Rolliog Mills Ltd., Kumbardhubi,

31-7-69

Structural steel (ordinary quality)—18:1977-1962.

33 CM/L-70S 29-6-1964

District Dhanbad, Bihar.

S E P T

.

M/s. Rama Rolling Mills, 156 Manicktola Main

1-8-68

Structural steel (standard quality)—IS: 226-1962. 31-7-69

34

2 9

,

Road, Calcutta.

CM/L-706 29-6-1964

M/s.Rama Rolling Mills, 156 Manicktola Main

1-8-68

Structural steel (ordinary quality)—IS: 1977-1062. 31-7-69

35

Road Calcutta.

1 S H S 8 CM/L-7°7 29-6-1964

/

M/s. Sun Rolling Mills Pvt. Ltd^ 8 Bidhan

1-8-68

Structural steel (standard quality) IS: 226 — 1962.

36

31-7-69

A S V

I

Saranee, Calcutta.

CM/L-708 29-6-1964

N A

1-8-68

M/s. Sun Rolling Mills Pvt. Ltd., 8 Bidhan Structural steel (ordinary quality)—IS: 1977-1962. 31-7-69

37

6

, CM,'L-7 39 29-6-1954

Saranee, Calcutta.

M/s. Bengal Rolling Mills Limited, 67/B, Netaji £ Structural steel (standard quality)—IS: 226-1962. 1-8-68 31-7-69

3"

1 8 9 0 CM/L-710 29^6-1964

Subhas Road, Calcutta,

1^8-68

M/s. Bengal Rolling Mills Limited,* 67/B, Netaji Structural steel (ordinary qualtty)^IS: it,7'--$e2. 31-7-69

3>

Subhas Road, Calcutta.

CM/L-711 -.9 6-1964

4 5 7 3

( I)

( 2)

C3)

(4)

1.5)

4 5 7 4

(6)

40

1-8-68

Structural steel (standard q n a l i t y ) ^ IS : 226-1962

M / s. L a u l s P v t . L t d ., Faridab ad T o w n s h i p, Distt.

31-7-69

CM/L-714 29-6-1964

Gurgaon.

W

41

1-8-68 31-7-69 M / s. L a u l s P v t. Ltd.,Faridabad Township, Distt. Structural steel (ordinary quality)—IS: 1977-1962

E CM/L-715 29-6-1964

Gtirgaon,

1-8-68

42

M / s. Ajanta Iron & Steel C o. .Loni Road, Shahdara,

31-7-69

Structural steel (standard quality)—IS: 226-1962 CM/L-718 29-6-1964

Delhi.

1-8-6*8 31-7-69 itl/s. AjantaIron & Steel Co.,LonfRoad,Shahdara, Structural steel (ordinary quality)—IS: 1977-1962 43 CJ^/L-7I9 29-6-I964

Delhi.

G A Z E T T E

M / s . M o d em Industries, Sahibabad(GtLaziabad),

1-8-68

44

31-7-69

e£t/L-7fc 29-6-1964

D i s tt .Mee rut.

Structural steel (standard quality), ttsrtd steel rounds up to 25 mm in cha (1 inch) and other sections of equivalent area o n l y — I S: 236-1962

O F J N D

I

M/s. Modern Industries, Sahibabad (Ghaziabad),

1-8-68

45

31-7-69

A

D i i t i. Meerut.

CM/L-721 2SM5--I964

, :

Structural steel (ordinary quality), tested steel rounds up to 25 mm in dia (1 inch) and other sectionsjof Equivalent area cady—IS: 1977-1962

S E F 46

M / s. Kisaao Engg. Works P. L t d, Dankaur Station, Structural steel (.standard quality)—IS: 226-1962 1-8-68 31-7-69

I

V CM/L-724 2 9 ^ 1 9 64

N. Rly., Distt. BulandshahT.

J B

M / s . K i s a a n E n g g. Works P. L t d ., Dankanr Station , Structural steel (ordinary quality)—IS: 1977-1962 1-8-68 31-7-69

47

,

i

N. Rly, b i s t t, Bulandshahr.

CM/L-725 29-6-1964

m

/

48

M / s. N av Bharat Steel Rolling Mills, Bombay-Agra Structural steel (standard quality)—IS: 226-1962 1-8-68 31-7-69

Road, fihandup, Bombay-78.

QM/I-73O 39-6-1964

M / s. N av Bharat SteeJ Rolling Mills, Bombay-Agra Structural steel (ordinary quality)—IS : 1977-1962 31-7-69

1-8-68

49

A S P B O