According to Dr C Rangarajan chairman of Prime Minister's Economic Advisory Council, with the credit offtake likely to pick up during the second half of next fiscal, the Government is likely to frontload its borrowing plans during the first half of next fiscal.

The Government had followed a similar strategy during this fiscal.

Dr Rangarajan while speaking on the sidelines of an interactive session organized by the Calcutta Chamber of Commerce said that “Credit demand in the industry usually picks up during the second half of a fiscal year so the Government will do a greater part of the borrowing during the first half of the year.”

The net market borrowing by the Government is pegged at INR 345000 crore during 2010-11.

He said that food prices are likely to come down over the next two months and food inflation is expected to fall to 6% during the second half of the 2010-11.

Dr Rangarajan said that “The increasing food price inflation is a cause of concern and is primarily a supply side phenomena. However, this (food price inflation) is likely to come down if there is a good rabi harvest.”

The annual rate of inflation for food index declined marginally at 17.81% for the week ended February 27th 2010, against 17.87% in the previous week.

(Sourced from Business Line)