Finance minister Pranab Mukherjee on Saturday assured the industry that the Centre’s borrowing programme for 2011-12 would not crowd out private sector borrowings. “I can assure that our borrowing programme, in consultation with RBI, will be in such a manner that there would be no problem for the private sector,” Mukherjee said after a meeting with the Central Board of Directors of the RBI. With prospects of high tax buoyancy and healthy disinvestment proceeds, the Centre has lowered its market borrowings target to Rs. 4.17 lakh crore for 2011-12 against Rs. 4.47 lakh crore estimated in the current fiscal. But the industry is plagued by problems of a liquidity shortfall and rising interest rates following the RBI’s decision to raise key policy rates seven times since March 2010 to contain inflation. Mukherjee pointed out that in the current fiscal too the Centre has carried out market borrowings programme without disrupting the flow of capital to the private sector.
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