Fiscal Shortage Force Not Exist In Two Times Digits - June 22, 2009

The Planning Commission said the fiscal deficit will be high but not in "double digits". The Planning Commission stated in order to pacify the fears of banks that high government borrowing would not allow interest rates to come down. "Bankers are always concerned about the size of the government''s borrowing. Because it is very large, many of them think that the interest rate on government debt will rise and they would rather retain liquidity now in order to invest in high-yielding government bonds," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

However, he directed bankers to wait, as it is not known that what the government borrowing would be till the Budget and added that "I feel it will be possible to accommodate a reasonable fiscal deficit".