RBI, backdoor financier?

The Reserve Bank of India (RBI) has once again expressed its anguish over the state of central finances in its latest monetary policy review. This is a repetition of the view in an earlier review that monetary policy cannot bear the burden of fiscal deficits. The proposed additional borrowing by the Centre of Rs 53,000 crore has already sent the securities market into jitters. RBI refers to the consequent crowding out of the private sector from the market.

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