Budget and Monetary Policy

The large market borrowings implicit in the special measures proposed in the 2003-04 Budget for (i) prepayment of high-cost external loans to multilateral agencies, (ii) enabling state governments to extinguish their high-cost debt to the government of India through debt-swaps, and (iii) buying back past high interest government loans from commercial banks are sure to come in the way of the RBI pursuing its avowed easy interest rate policy.