Pranab against tightening of monetary policy
Finance minister Pranab Mukherjee said Reserve Bank should not tighten the monetary policy as the government has planned to borrow huge amounts from the market.kolkata Updated: Sep 23, 2009 15:47 IST
Finance minister Pranab Mukherjee on Wednesday said Reserve Bank should not tighten the monetary policy as the government has planned to borrow huge amounts from the market.
"I am not prescribing a tight money policy", he said, pointing out that fiscal and monetary policies adopted by the government and the RBI to combat the slowdown are paying dividends and signs of recovery have started to show up.
The government proposed to borrow about Rs 4.5 lakh crore from the money market during the current fiscal against Rs 3.1 lakh crore in the previous fiscal.
RBI, which has considerably eased the monetary policy to provide liquidity to the crisis-hit industry, is slated to announce second quarterly review of the monetary policy on October 27.
Referring to the growth prospects during the current fiscal, the Minister expressed hope that the country would register over six per cent GDP growth. "Both the fiscal and the monetary policies are working well in tandem and paying dividends," he added.
The Asian Development Bank in its recent update on the Asian Development Outlook has revised India's growth projections to 6 per cent from 5 per cent. The Planning Commission has projected 6.3 per cent economic expansion during the fiscal.