Govt borrowing to be in line with budget: RBI

Kolkata, Sept 22: Allying worries of possible increase in borrowings, Reserve Bank of India (RBI) Deputy Governor Rakesh Mohan today said the government's second-half debt programme would be in line with its budget.

"The borrowing programme will meet the budget target, " Mr Mohan said when asked by reporters in the sidelines of a CII-sponsored interactive session with West Bengal Chief Minister Buddhadeb Bhattacharjee.

The budget deficit for the first four months of 2006-07 sparked speculation that the government might need to borrow more than it had projected.

Mr Mohan acknowledged that money supply had grown faster than a projected annual rate of 15 per cent, with credit growth being financed by growth in deposit. He, however, said policy operated with a lag.

The Central Bank expects the economy to grow 7.5-8.0 per cent in the current fiscal. Mr Mohan said it could withstand a slowdown in the United States.

"One of the characteristics of the Indian economy is we are very diversified. In terms of trade composition also we are very diversified, " he said.

Mr Mohan said it was not clear whether the recent decline in oil prices to six-month lows was sustainable.

UNI