Reserve Bank Governor D Subbarao today cautioned the government that excessive borrowing is bad and urged to put a cap on the public debt as it would hurt growth.

Addressing an International Research Conference in Mumbai, Subbarao said that there is an inflexion point beyond which fiscal deficits militate against growth. He said that government borrowing is not bad per se, but excessive borrowing is and therefore there is a need to cap total public debt as a proportion of GDP.

The government's fiscal deficit in 2011-12 is expected to exceed the budget estimate of 4.6 per cent of the GDP on account of subdued receipts and overshooting of the subsidy bill by at least Rs 1 lakh crore over and above the original projection.