Government to borrow an additional Rs 46,000 crore
The central government's plan to borrow an additional Rs 46,000 crore in the remaining period of the current financial year will not cause any liquidity problems
By ET Bureau |
NEW DELHI: The central government's plan to borrow an additional Rs 46,000 crore in the remaining period of the current financial year will not cause any liquidity problems, said the Planning Commission deputy chairman Montek Singh Ahluwalia in the Capital on Tuesday.
"I have no doubt that the extra borrowings can be accommodated this year," he said. Dr Ahluwalia was speaking on the sidelines of a book launch organised by industry body CII and Institute of South Asian Studies (iSAS). The Indian government, which had announced that it will borrow this additional amount between February 20 and March 20 this year, is relying on borrowings to fund fiscal stimulus measures in the next fiscal.
Dr Ahluwalia further said that any such stimulus package at this point will have to be met by borrowings. "If the government raises taxes, that would lower consumption which would not have the desired effect in stimulating the economy. So, the government has to borrow if it plans to come out with more stimulus packages," he added. He also stressed on need to increase infrastructure spending in the country, particularly through public-private partnership model.
When asked if the countries around the world are adopting a protectionist attitude, Dr Ahluwalia said that it remains a concern. "This concern was raised in the recent Davos meet as well. I think we need to reach an adequate political consensus on such potential protectionism. British PM Gordon Brown spoke of this in Davos and hopefully when we meet under his chairmanship in the next G20 meet in London, they will provide us with a critical lead onto the issue."
"I have no doubt that the extra borrowings can be accommodated this year," he said. Dr Ahluwalia was speaking on the sidelines of a book launch organised by industry body CII and Institute of South Asian Studies (iSAS). The Indian government, which had announced that it will borrow this additional amount between February 20 and March 20 this year, is relying on borrowings to fund fiscal stimulus measures in the next fiscal.
Dr Ahluwalia further said that any such stimulus package at this point will have to be met by borrowings. "If the government raises taxes, that would lower consumption which would not have the desired effect in stimulating the economy. So, the government has to borrow if it plans to come out with more stimulus packages," he added. He also stressed on need to increase infrastructure spending in the country, particularly through public-private partnership model.
When asked if the countries around the world are adopting a protectionist attitude, Dr Ahluwalia said that it remains a concern. "This concern was raised in the recent Davos meet as well. I think we need to reach an adequate political consensus on such potential protectionism. British PM Gordon Brown spoke of this in Davos and hopefully when we meet under his chairmanship in the next G20 meet in London, they will provide us with a critical lead onto the issue."
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