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Pranab dispels fears about high fiscal deficit

Jangipur (West Bengal): Union Finance Minister Pranab Mukherjee on Sunday dispelled fears about the high fiscal deficit projected in the budget, saying the Reserve Bank of India would be able to manage the government borrowing programmes effectively.

Speaking at a State Bank of India function here, Mr. Mukherjee said he had a meeting with the RBI Board of Governors on Saturday.

“I hope the RBI would be able to manage debt effectively as it had done in the last fiscal,” the Finance Minister said.

In 2008-09, the government borrowings were pegged at Rs. 1 lakh crore. But because of the slowdown, total government borrowings had risen to Rs. 3 lakh crore, Mr. Mukherjee said.

In such a situation, the RBI had been able to manage debt effectively, the Minister pointed out.

To a query, he said there would be no crowding-out effect of private investments and interest rates would not rise.

The Minister inaugurated 154 branches and 2,151 ATMs of the SBI in the country.

SBI Chairman O.P. Bhatt said that last year the bank was able to provide services to 53,000 unbanked villages and blocks through business correspondence all over the country. This year it would similarly reach out to 50,000 such areas.

“This is the first time in the banking history of the world that so many branches and ATMs have been opened on a single day,” he claimed. — PTI

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