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More stimulus packages unwarranted: RBI chief
New Delhi, Mar 26 (IANS):
Published on 27 Mar. 2009 12:00 AM IST
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Another stimulus package to help India’s recession-hit economy would put pressure on the credit markets, Reserve Bank of India (RBI) Governor D. Subbarao said here Thursday. Similar schemes announced earlier should be given time to show results, he added. “That (another stimulus package) is not so simple. There is a cost to support further stimulus, there will be pressure on the credit market. I personally think we should give them (earlier packages) time to run for the moment,” Subbarao told reporters on the sidelines of the Confederation of Indian Industry’s annual conference. The government has plans to borrow Rs.360, 000 crore (about $71 billion) in the next financial year. Of this, Rs.240, 000 crore will be borrowed by September-end. The apex bank’s chief also tried to quell fears that the economy would get into a tailspin on account of the falling inflation rate that touched an all-time low of 0.27 percent for the week ended March 14, saying this was mere statistics. “This is statistical and there is no fear of our going into deep deflation. We have comfortable foreign reserves and there is no wealth-loss effect in India,” Subbarao said. “Those demands of growth that prevailed recently are still intact,” he said, and added that India’s recovery would be “sharper and quicker”.

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