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RBI will meet Centre's borrowing needs: Jalan

Reserve Bank Governor Bimal Jalan said on Tuesday the apex bank would be able to meet the borrowing requirements of the government in the current fiscal.

"We will be able to handle all the borrowing requirements of the government and there will be no problem even if there is a spill over," Jalan told reporters after addressing a seminar, organised by Bombay Chamber of Commerce and Industry and Assocham in Mumbai.

The Union Budget for 2002-03 placed the net and gross market borrowings of the central government at Rs 95,859 crore (Rs 958.59 billion) and Rs 1,42,867 crore (Rs 1,428.67 billion), respectively. The Centre completed net borrowings of Rs 74,065 crore (Rs 740.65 billion or 77.3 per cent of the budgeted amount) and gross borrowings of Rs 1,10,032 crore (Rs 1,100.32 billion or 77 per cent of the budgeted amount) up to October 25.

In the October mid-term review, Jalan stated that the borrowing programme may get affected by lower than anticipated real economic activity, shortfall in divestment proceeds and higher expenditure on account of drought relief.

On implication of the recent rate cut by Federal Reserve on India, the RBI governor said: "These two are unrelated as our interest rates are determined by the domestic situation (in the country)."

Asked if a reduction in the repo rate was being contemplated, Jalan said, "There is no change in it just now."

Earlier in his address, he said India has the opportunity and ability to become the second largest economy in the world over the next 25 years.

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