reserve Bank of India
Reserve Bank of India (RBI) Governor Shaktikanta Das said on Monday that government borrowing, lower than market expectations, will increase the availability of capital for the private sector. This will reduce inflation and promote economic growth. Das said that this year’s borrowing is less than the initial expectations of the market. Lower borrowing volume means that banks will have more resources available to meet the needs of the private sector.
Private sector will get a boom
He said that less government borrowing is a step to promote economic growth, because it will provide more loans to the private sector to make their investments. Das said that apart from this, it should help in controlling the level of inflation. Finance Minister Nirmala Sitharaman in her interim budget proposed to borrow Rs 14.13 lakh crore by issuing long-term securities maturing in a fixed period to meet the revenue shortfall in the next financial year starting April 1. Is.
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Last year’s borrowing is highest
This is less than last year’s gross borrowing estimate of Rs 15.43 lakh crore. Last year’s borrowing was the highest ever. Borrowing estimates for the financial year 2024-25 have been kept low due to increasing revenues and fiscal consolidation measures of the government. Regarding the importance of debt for monetary policy, Das said that it is one of the factors that is taken into account while formulating monetary policy. It helps in reducing the level of inflation along with promoting growth. On the debt-GDP ratio, the RBI Governor said that it had reached a high of 88 percent during the Covid period. Since then it has been softening.