Press Trust of India / New Delhi Jul 15, 2009, 19:38 IST
The government hopes that the economy will revive in the next three months and hence it is planning to borrow from the market directly now as later on private demand for funds will increase.
"As the economy revives, which we hope it will in next three months or so, there will be demands for more borrowing by other players and therefore, we are trying to borrow more directly at this stage," Finance Secretary Ashok Chawla said.
The RBI will support the government through open market operations to meet its funding requirements due to rising expenditure required to spur the economy, Chawla said at a CII seminar here.
In fact, the Finance Ministry and RBI officials are meeting tomorrow to come out with an indicative calendar for the government's market borrowings for the first half of the current fiscal, he said.
As tax receipts are expected to come down while the expenditure is increasing, the fiscal deficit is projected to be at 6.8 per cent of GDP this fiscal. And the government has pegged its borrowings at around Rs 4 lakh crore or 2009-10.
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