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The Finance Minister, Mr Pranab Mukherjee, on Saturday said Government borrowing in financial year 2011-12 would be done in a non-disruptive manner, leaving enough room for the private sector to meet their resource requirements from the market.
“In 2010-11, we conducted Government borrowing in a manner that there was no disruption in the market and private sector did not face any problem in having resources from the market.
“For 2011-12 also I can assure you that our borrowing program in consultation with the RBI will be done in such a manner that there will be no problem for the private sector,” Mr Mukherjee told reporters after his customary post-Budget meeting with the Central Board of the Reserve Bank of India (RBI) here today.
Private sector expansion
The Finance Minister also highlighted that the latest Budget (for 2011-12) has a number of proposals to expand the space for private sector.
For 2011-12, the Government's gross borrowing has been pegged at Rs 4,17,000 crore, lower than the gross borrowing of Rs 4,47,000 crore for the current fiscal. The net borrowing for 2011-12 has been pegged at Rs 3,43,000 crore, compared with Rs 3,35,000 crore this financial year.
In his interaction with the RBI board members, Mr Mukherjee had explained the nuances of the Budget and stressed the need for sustaining post-crisis economic recovery and growth momentum, while keeping inflation in check against the uncertainty of oil price rise. This was essential for furthering the Government's agenda on inclusive development, said a statement issued by the RBI after the meeting.
During the meeting, the RBI Governor, Dr D. Subbarao, had stressed the need to focus on qualitative aspects apart from quantitative aspects of expenditure reduction, the RBI statement added. Meanwhile, Mr Mukherjee told reporters that apart from customary exchange of views on Budget proposals, this time round, he had received many “valuable suggestions” from the RBI board that can be termed as “actionable suggestions” and relevant for implementing various Budget proposals. “In consultation with the RBI, we will be doing so,” he said, adding that it was a “productive” interaction.
On the challenges before the economy, Mr Mukherjee said there was lot of uncertainty in recovery. “Recovery is taking place. But there is trouble in West Asia and Africa. Oil volatility is deepening the uncertainty. There is problem of whether the sovereign debt crisis of four European countries will confine itself within those countries or have adverse impact in rest of Europe,” he said. The Finance Minister also highlighted that rapid and robust recovery of Europe is important for India from two important aspects.
“Our export destination is still substantially towards Europe. Second from the FDI point of view,” he said. “Therefore, fragility of recovery of the world economy, the uncertainty created because of political unrest in West Asia and North Africa have serious implications for the Indian policy makers. As we have overcome the financial crisis, I am confident we will be able to face the challenges.”
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