that, if there is no increase in global demand to offset the expected increase in desired savings, it may be difficult for monetary policy to effectively fulfill its role as the main short - run economic stabilizer in the years ahead. so, what should policy - makers be doing now to help us avoid a keynesian deflationary gap in the future? as it turns out, most of the policy prescriptions that i spoke about earlier in the context of the resolution of today's imbalances would also address potential problems further ahead. let me now return to those policies and talk about them in a bit more detail. first, one might look to governments to provide an expansionary fiscal policy. in a few economies, there is clearly room for fiscal policy to become more stimulative in order to boost investment and demand. certainly, the economies of emerging asia have the scope to support demand with fiscal policy. but in north america, europe, and japan the scope for fiscal policy to spur demand appears to be very limited, given current debt levels in most of these countries and the increasing demands that aging populations will place on the government sector. the strain on the public purse to meet the needs of our aging populations will be enormous. the situation will be more serious in those countries that have not yet taken steps to ensure that their public pension systems will be able to handle the retirement of the baby - boom generation. unless the ratios of public debt - to - gdp are reduced before this strain is felt, governments in many countries will face the difficult task of reducing services or raising taxes, or both. in any event, public debt in some countries may have already become so large that additional fiscal stimulus might actually be counterproductive. households, anxious about future tax liabilities or the viability of public pensions, might cut back on consumption. this could offset the positive effects of the easier policy stance. but if there is any scope at all for effective fiscal action, i would argue that the emphasis should be on improving the economic infrastructure in a way that can support the production capacity of the economy while, at the same time, helping to meet rising social needs as the working population begins to decline. this might include additional money for education and training, which by adding to human capital, would help maintain the production capacity of the world economy. but if there is one thing that all governments can do to stimulate demand, it is to have appropriate structural policies, and i stress the word " appropriate. " structural

financial system in india is dominated by banks and so is the case in goa. in fact, goa leads in terms of development of banking in india. over time, the number of commercial bank branches in goa increased steadily from only 5 in 1962 to 459 by endjune 2011. there is a state cooperative bank and 7 urban cooperative banks with 136 branches. with a ratio of 3, 180 populations per commercial bank branch as against allindia average of 13, 270, goa has one of the best banking services in the country. the sectoral flow of credit reflects the structure of the economy and the demographics. the industrial sector accounted for the highest share in credit followed by personal loans and services. the industrial sector receives maximum credit reflecting continuing industrialization. goa, being one of the prime tourist destinations, the hospitality sector led services sector in attracting credit. the high per capita income level of the population reflecting greater borrowing capacity explains a high share of personal loans in the overall credit. however, credit flow to agriculture remained low, though 50 per cent of the population was still rural ( chart 2 ). bis central bankers ’ speeches while the share of agriculture in nsdp has reduced sharply over the years, goa is also known for its distinct agricultural products such as mangoes, cashew and grapes. a fading agriculture sector may not be a sustainable feature for balanced growth in a long - term perspective. therefore, concerted efforts need to be made to promote agriculture in the state. this also requires sustained credit flow to agriculture. the state government has made provision for subsidized farm loans and subsidy for acquisition of agricultural implements. this will also help increase the level of credit - deposit ( cd ) ratio in the state which is relatively low as compared with the all - india level. the c - d ratio of the state of around 30 per cent compared with about 75 per cent at the allindia level does not appear commensurate with its high level of economic development ( chart 3 ). the recorded c - d ratio, however, understates the extent of credit penetration for mainly three reasons. first, major industries such as pharmaceuticals and hotels source credit from their head office locations which are outside the state. hence, such credit flow does not reflect in the c - d ratio of the state. second, internal cash generation in industries such as tourism and iron - ore reduces institutional finance. third, with a substantial share of non - resident deposits, the deposit base is large which imparts