FM allays fear of high Govt borrowing

FM allayed fears that high Govt borrowing,for the current fiscal will leave little resources for pvt sector.

Written by Agencies | New Delhi | Published: July 11, 2009 3:16 pm

Finance Minister Pranab Mukherjee allayed fears that high Government market borrowing,pegged at about Rs 4 lakh crore,for the current fiscal will leave little resources for the private sector.

Just as the Reserve Bank managed market borrowings of the Government,which increased after the stimulus packages were announced last fiscal,without disrupting markets,similarly it will handle it this fiscal,Mukherjee told reporters after his customary post-budget meeting with the RBI board.

The Government’s borrowing is projected to be around Rs 4 lakh crore for this fiscal to fund its widening fiscal deficit pegged at 6.8 per cent of GDP.

Many fear that the high borrowing will crowd out or leave little money for the private sector to raise from the market.

Asked whether interest rate will be cut he said,appropriate actions would taken as and when required.

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