Govt borrowing won’t crowd out pvt sector credit: finance ministry source

Govt borrowing won’t crowd out pvt sector credit: finance ministry source

Mumbai: The government’s extra borrowing in the second-half of this fiscal year will not crowd out private sector credit, a finance ministry source, who did not wish to be named, told reporters.

The government estimates a shortfall of 35000 crore ($7.2 billion) in small savings in the 2011/12 financial year, he said.

Govt will borrow 2.2 trillion in the second half of the fiscal year that begins on 1 Oct, higher than the budgeted 1.67 trillion, R. Gopalan, economic affairs secretary had said earlier.

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