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    RBI rules out printing more money to cover fiscal deficit

    Synopsis

    RBI Governor Shaktikanta Das on Thursday said the central bank has no plans to monetise the rising fiscal deficit. This is the third consecutive year that the government has revised its fiscal deficit target.

    Reuters
    RBI Governor Shaktikanta Das on Thursday said the central bank has no plans to monetise the rising fiscal deficit. This is the third consecutive year that the government has revised its fiscal deficit target.

    The budget has pegged fiscal deficit at 3.8 per cent for the current fiscal year, up from 3.3 per cent projected in the previous budget; and at 3.5 per cent for FY21, up from 3 per cent estimated in the July 2019. The government has already crossed the fiscal deficit at 132 per cent of the estimate as of December end.

    The government has utilised 'escape clause' under the Fiscal Responsibility and Budget Management (FRBM) Act which provides it a 50 bps leeway for relaxation of fiscal deficit roadmap during time of stress. Accordingly, it has budgeted a net borrowing Rs 5.45 lakh crore from the market in FY21. "There is no plan to monetise the government's fiscal deficit," Das told reporters during the post-policy conference.
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    5 Comments on this Story

    rajan gangar294 days ago
    The sooner they do the better it would be....printing in a controlled manner would help address many issues. Remember what US did in 2018.An 800 billion writeoff..we certainly are not in that situation but a controlled and strategic move would infact help.
    Enagula nath295 days ago
    The new perception now clearly understood by common man in the streets is BJP does not do what It promises but certainly does do what it does not promise. The second phase of demonetisation has begun and further economic slowdown is assured.
    FM is ensuring senior citizens have less money in their hands to even afford basic survival needs. Senior citizens were treated at par with the normal working class taxpayers.
    The interest earned on their savings is now negative because of high rate of inflation.
    The tax rebate given to senior citizens is withdrawn.
    with lowered returns from savings and continuous increasing cost of living,I myself have reduced taking medicines because I'm unable to afford them. Eating less because oil, rice, flour,pulses,vegetables have become expensive, moved further away into remote area to pay less house rent. stopped subscribing for cable TV, stopped recharging my mobile and making fewer phone calls.
    Worse days in my twilight years of my life.Shame Shame.
    Modi has tactfully planned to kill silently the senior citizens.There is anguish and misery in the retired poor people who worked in private sectors.
    How low can the moral of BJP fall.
    I regret being a strong supporter of MODI JI.
    No senior citizen is happy the way MODI policy is slowly killing the senior citizens. Inflation is galloping, Income is decreasing. Senior citizens back is to the wall.
    Padamnoor Pradeep295 days ago
    INR value can always be increased by buying Gold with dollars before the dollar losses value.
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