With a view to raising additional resources to fund public expenditure in order to stimulate the domestic economy,the government in consultation with the RBI today decided to borrow Rs 46,000 crore in four tranches in the next month and a half.
The calendar has already come out. The quantum and mode of borrowing has come out… we are going to manage the borrowing in such a way that there is no disruption in the market, RBI Governor D Subbarao told reporters on the sidelines of a function here to release a book on monetary policy.
The first tranche of Rs 12,000 crore would be raised between February 20 and February 27. It will be followed by a second tranche of the same amount between February 27 and March 6,the RBI said in a release. The third and fourth tranches of Rs 12,000 crore and Rs 10,000 crore respectively would be raised between March 6 and March 13 and between March 13 and March 20 respectively.
The additional funds will be utilised for the purpose of meeting the extra expenditure being incurred by the government on fighting the economic slowdown.
However,the additional borrowing programme of the government will not tighten the liquidity in the country, Economic Affairs Secretary Ashok Chawla said.
The government had provided a stimulus of Rs 1,50,000 crore by way of excess expenditure and about Rs 50,000 crore by way of tax concessions to the industry to battle the slowdown.
Commenting on the countrys response to the financial crisis,Subbarao said,the speed and quantum of Indias response is far more than many other countries. He added that the country was hit because it was rapidly integrating through the trade and financial sectors.
He also repeated the assertion that the countrys banks are safe as they have no exposure to tainted assets.
The RBI Governor said the financial crisis in India has risen from the real sector and impacted the financial sector,unlike the developed countries where it was the other way round.
Deputy governor of the RBI Rakesh Mohan,at the release of his book,said the government had different instruments through which it could raise capital.
The Market Stabilisation Scheme is one instrument and the Open Market Operation is another instrument… so they are being used as and when necessary,and contextually, he added. (With agencies)