Following the announcement of the new system and the presentation of the budget incorporating the new system there has been a debate on the features of the system as well as its functioning in 1997-98. First, that it is only a new name for the old system. Second, that without a statutory ceiling on debt, the system will serve no purpose.
Third, that the degree of autonomy for monetary policy is still limited. Fourth, that the budgeted figures show that the new system will involve large borrowings and more monetisation and, therefore, is inflationary. Let me analyse each one of the issues. 14. As already explained, the new system implies the repayment of advances made and not their accumulation year after year.