Reserve Bank of India (RBI) is awaiting the final numbers on fiscal deficit from the government to formulate its monetary policy stance. The budgeted fiscal deficit level is at 5.1% and according to RBI, indications are that the government is all set to maintain fiscal deficit at the same level in the financial year ending March 2013.
Speaking to reporters after the central board meeting of RBI on Thursday in Puducherry, D Subbarao said, ?The government is doing quite a lot on addressing the fiscal deficit, but it is not yet clear what the outcome would be.? RBI governor said the final figure on fiscal deficit is vital to the central bank to arrive at its own monetary policy calculations. Indications from the half-yearly cash and debt management meeting held last week with central government for finalising the borrowing calendar also shows consistency with the budgeted number.
Subbarao said, ?We have to make a determination in the next few weeks what the final outcome might be. That will determine our monetary policy calculation.?
On the steps government has taken to control fisal deficit, he said, ?What else the government has to do is a question of details. But as far as RBI is concerned, the final number will be important. How they get it will be important for the country, for the economy and for all of us. But I am saying, in the short term, for the monetary policy calculation, the number is important.?
Pointing that RBI will take all the views on economic growth into consideration when it comes out with its next monetary policy review slates for October 30, Subbarao said, ?RBI?s effort is to curb inflation while supporting growth.?
RBI central board meeting held at Puducherry has discussed about the Kelkar Committee recommendations. The board meeting also discussed the priority sector lending and the Dr Nair committee recommendations and the vision document on payment and settlement systems, besides the economic situation, he added.