ICICI Bank Chairman K V Kamath on Sunday said the Indian economy could grow by 8.5 per cent in current fiscal, but warned the government against massive borrowing and said this would obstruct banks from lowering lending rates.
Advising the government to look for alternative sources for raising funds to pursue its employment and rural economy programmes, which he termed as a must for high growth, Kamath said, "I think we have hit the road at a pace where we can aspire for 8.5 per cent growth in not a difficult way."
At the same time, he cautioned that the government's massive borrowing programme was putting pressure on the market by keeping interest rates high.
"What is required from the government at this point of time is an articulation of thought as how this gap (between public spending programmes and required funds) will be bridged and the government has several ways in which it can bridge the gap," Kamath said.
Elaborating on the alternative sources of funds, Kamath said, "For example, it could (selectively) divest (in PSUs), it could offload spectrum."
"I am reasonably sure they are thinking about this (alternative mechanism of resource generation). All they need to do is to articulate to the markets so that it could pull up the market," the ICICI Bank Chairman said.