Review of the Definition of Money Supply in India (1961-2002)

The definition of money supply is in an evolving process in India since 1961. Indian economists use the terms 'money', 'money supply' and 'money stock' synonymously. Despite the definitions of money in the context of India provided by RBI and Indian monetary economists there was a feeling persistent till the late '80s that economic theory had not provided a clear-cut, complete and unequivocal answer to the question of the appropriate definition of money supply though a good number of papers related to money supply in India were published during the late '70s and the entirety of '80s. Again in the end of '90s, it was felt that there is no unique definition of money though a good number of papers related to money were published during the period from 1989 to 1997. Finally RBI defined e-money, which is not the electronic form of 'money'. This paper provides a brief account of all the above studies in a unified manner such as to unfold the evolution of definition of money.