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Viral Acharya raises alarm on increased govt borrowing

Jul 23, 2019 21:27 IST

Viral Acharya on Tuesday said that large government borrowing will impact the debt market and will put the pressure on keeping the interest rates high, making it expensive for companies to borrow. In a lecture published on the Federal Bank website, the outgoing deputy governor cautioned that India should cut back on subsidies that are not yielding long-term growth but should focus on divesting more of its public sector holdings. Acharya mentioned that India's relative borrowing to its output has gone up from 67% in 2000 to 85% currently, outpacing several major economies including China.

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