The corollary of such a step is the possibility that the Bank might incur a capital loss. Given the current severe economic and financial situation, when the Bank started to purchase stocks held by banks, it was determined to take any measures, even highly risky ones unthinkable under conventional conditions, if and when they were absolutely necessary to fulfil its mandate.
Third, as a result of lower debt servicing costs and higher tax revenue collections the size of public sector development expenditure will rise from Rs.130 billion to Rs.150 billion in 2003-04 and Rs.180 billion in 2004-05. This will help give a spur to private sector investment also. Tax revenues are projected to increase from Rs.460 billion this year to Rs.560 billion in 2004-05.