Sixth Pay Commission: FE Editorial : Growth booster?
In 2008-09, the government plans to borrow (gross) Rs 1,35,000 crore and RBI figures show 78.52% of planned borrowing has
been done in the first six months. The bonds have been at interest rates between 7.38% and 8.33% and cut-off prices on
364-day treasury bills have been marginally higher. This is not the only way government pre-empts funds from private uses and
upshot of pre-emption is both lack of liquidity and higher interest rates. Ostensibly, the government is on an austerity
drive. But that is not reflected in supplementary grants. One can understand the clubbing of third supplementary demand for
grants (usually in Budget session) with the second demand (winter session) because there might not be a Budget session. (more…)