The statement of Gokarn came on the backdrop of rising fiscal deficit of the government, and continous declining trend of GDP growth seen during the current fiscal year.
India is on course to miss the fiscal deficit target for current fiscal at 4.6 per cent, while as per analysts the government will miss the target by almost a per cent.
The words of Gokarn may also ease the offenders in financial markets who believe that RBI has been helping government through its open market operations (OMOs).
However, Gokarn had earlier too clarified that the primary objective of buying government bonds is to inject liquidity in markets and not to push down the yields on government's bonds.
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