Govt to transfer Rs 28,000 cr from MSS

The government will transfer Rs 28,000 crore from market stabilisation scheme (MSS) to the normal cash account of the government, so that it need not go for additional borrowings.

"On a review of cash position, the government of India, in consultation with the Reserve bank of India, decided to transfer an amount of Rs 28,000 crore from the MSS cash account to the normal cash account of the government," the Reserve Bank said in a statement issued here today.

Generally, MSS borrowings are held in a separate account than normal government borrowings. However, the government signed an MoU with the RBI last fiscal to transfer some of the MSS amount to normal cash account of the government, which is called desequestering of MSS bonds.

 

An equal amount of Rs 28,000 crore, the RBI said, would be a part of the government borrowing for the current fiscal.

During 2009-10, Rs 33,000 of MSS balances will be converted into normal borrowing depending on fund requirements of the government.