So, the bankers will have to live with Rs.1.5 trillion or more cash shortage in the system daily till such time the government decides to spend. Its cash balance kept with the central bank at this point is almost of the same amount.
Rajan has left the growth forecasts unchanged—7.4% for the current fiscal year (with a downside bias) and 7.6% for fiscal year 2007 despite the recent moderation in industrial activity.
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* This article was first featured in Mint
About the Author
Tamal Bandyopadhyay is one of the most respected business journalists in India. Currently, he is a Consulting Editor of Mint, writes a weekly column on Mint - Banker's Trust, which is widely read for its deep insights into the world of finance. He is also an Adviser on Strategy for Bandhan Bank.
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