The government decided to leave interest rates on small savings instruments untouched for the time being even as it said the first tranche of the Market Stabilisation Fund would hit the market in the first quarter of 2004-05. | |
| "There will be no change in interest rates on small savings for a while," Union Secretary (Expenditure and Budget) D Swarup said, after attending the advisory panel meeting, chaired by Reserve Bank of India Deputy Governor Rakesh Mohan, here. |
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| Chief Economic Adviser Ashok Lahiri, also a member of the panel, said, "It was an important issue and we had fruitful discussions." |
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| On Market Stabilisation Fund, Swarup said the scheme was in the final stages of approval and the first tranche would be included in the government's borrowing programme in the first quarter of 2004-05. |
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| The fund would be a combination of bonds and treasury bills and the exact amount was yet to be finalised, he said. |
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| The panel had met on February 23, when it decided that the Market Stabilisation Fund, which is being set up to mop-up surplus liquidity from the system, would have a ceiling of Rs 60,000 crore and interest rate for the same would be linked to market rates. |
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| RBI had also said the fund scheme would have a marginal impact on the revenue and fiscal deficits of the government. |
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| Before attending the meeting, Lahiri said "inflation would be around five per cent". |
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| RBI Governor YV Reddy had yesterday said inflation would be less than 5-5.5 per cent. |
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