Government borrows Rs28,000 crore from RBI

05 May 2009

The government has borrowed Rs28,000 crore ($5.7 billion) from the Reserve Bank of India (RBI) through transfer of  its intervention bonds to the government account, as part of a record borrowing programme planned for 2009-10 fiscal.

''On a review of its cash position, the Government of India, in consultation with the Reserve Bank of India, decided to transfer an amount of Rs28,000 crore from the MSS cash account to the normal cash account of the Government of India on 2 May 2009,'' an RBI release said, adding, ''An equivalent amount of government securities would accordingly form part of the normal borrowing of the Government of India for the fiscal year 2009-10.''

The government plans to borrow a total of Rs33,000 crore from the market stabilisation scheme (MSS) in this financial year.

The government had borrowed a total of Rs3,02,000 crore in fiscal 2008-09.

Earlier, on 4 March 2009, an amount of Rs12,000 crore was transferred from the MSS cash account to the normal cash account of the Government of India following the amendment to the memorandum of understanding on the market stabilisation scheme (MSS).

An equivalent amount of government securities accordingly formed part of the normal borrowing of the Government of India for the fiscal year 2008-09. It was also decided that based on the emerging fund requirements of the government, Rs33,000 crore of MSS balances will be de-sequestered against the approved market borrowing programme or bought back in the fiscal year 2009-10.