FM: RBI will manage debt well,as it did last fiscal

Union finance minister Pranab Mukherjee in his constituency here today tried to dispel fears about the high government borrowing affecting the private sector adversely.

Union finance minister Pranab Mukherjee in his constituency here today tried to dispel fears about the high government borrowing affecting the private sector adversely. He said there would be no upward revision of interest rates and the private sector would not be crowded out in the race for funds.

Budget 2009-10 has pegged government borrowing for this fiscal at Rs 4.51 lakh crore,which is about Rs 89,000 crore higher than the level projected at the time of the interim Budget.

Appreciating the role of the Reserve Bank of India in effective debt management,Mukherjee said the central bank was efficient enough to handle the proposed debt-raising programme of the government in 2008-09 and would continue to do so.

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He was addressing a press conference at Jangipur,his constituency,after the simultaneous inauguration of 154 branches and 2,151 ATMs of the State Bank of India all over the country. In Murshidabad alone,the bank opened three new branches and four ATMs today.

In 2008-09,the government had projected a borrowing programme of about Rs 1 lakh crore but on account of low revenue due to a slowdown in the economy,the borrowing went up to nearly Rs 3 lakh crore. But the RBI had managed the debt efficiently, he said,indicating that the RBI would be able to do so in the future.

On the issuing of rising prices of essential commodities,Mukherjee said that there was always a difference between the Wholesale Price Index (WPI) and the Consumer Price Index (CSI). The government,Mukherjee said,had set up a committee under the Central Statistical Organisation (CSO) to study the possible convergence of the WPI and the CPI.

rime Minister Narendra Modi addresses the gathering during the inauguration of the PM MITRA Park and foundation stone laying ceremony of development works, in Dhar, Madhya Pradesh. (@NarendraModi via PTI Photo)

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