RBI accepts the difficultly delivering 4.6% fiscal target

Posted By: Religare
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RBI accepts the difficultly delivering 4.6% fiscal target
After announcing the fiscal deficit of 4.6% of the gross domestic product, in the budget 2011-2012, the Reserve Bank of India accepted that it would be a challenge to achieve the same.

RBI has recently met its target of achieving of deficit of 5.1 per cent, high one-time revenues, therefore it said that the deficit for the current year could only be met if adjustments take place in case of rise fuel and fertilizer prices.

RBI, continuously struggling against inflation, further said it was important to make adjustments either in terms of the expenditure or tax side; however, hike in fuel prices remains to be the prime case of concern.

Currently the central bank has planned RS 4.17 lakh crore to be borrowed in the current financial year. However, the bank would work to raise Rs. 2.5 lakh crore in the first half. Further, RBI had raised ts lending rates to 50 bps on May 3, which is the ninth time since March 2010.

Hence, the bank also indicates towards the probability of more hikes due to the pressure created by the rising prices of the energy products.

Read more about: rbi, deficit, inflation
Story first published: Friday, May 20, 2011, 9:30 [IST]
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