RBI Update: Banking sector regulator Reserve Bank of India Governor Shakti Kanta Das said the government’s decision to borrow less than market estimates would have a positive impact. This decision will increase the availability of capital for the private sector, reduce inflation and boost the economy.
The RBI governor said the government’s borrowing plan for this year is lower than market estimates. Less borrowing means that the private sector will be able to borrow more from banks to meet its needs. He said that the lower government borrowing program would boost economic growth in the country as it would allow the private sector to get more loans from banks for their investments. The RBI Governor said that this decision of the government will also help in reducing the rate of inflation.
Finance Minister Nirmala Sitharaman in her interim budget has proposed to borrow Rs 14.13 lakh crore to meet the revenue shortfall during the fiscal year 2024-25, up from last year’s borrowing estimate of Rs 15.43 lakh crore. is less than Last year’s debt was the highest ever. Borrowing estimates for FY 2024-25 have been kept low due to revenue growth and the strengthening of the government’s fiscal measures.
On the importance of credit for monetary policy, the RBI governor said, it is kept in mind while formulating monetary policy. This helps to increase the growth rate and keep the inflation rate low. On the debt-GDP ratio, the RBI governor said it has reached an all-time high of 88 per cent during the Covid period. Since then it has been easing.
Earlier on Monday, Finance Minister Nirmala Sitharaman addressed the meeting of the Central Board of Directors of RBI. In the meeting, the finance minister mentioned the things that have been emphasized in the interim budget and also mentioned the expectations from the financial sector. The RBI Board took note of the global domestic economic situation as well as the global situation and fluctuations in global financial markets.
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(translation of tags) RBI data