Govt cancels Rs.12,000 cr bond auction to curb fiscal deficit

February 22, 2013

The government has cancelled the Rs.12,000-crore bond issue, cutting short its market borrowing programme for the current financial year with an aim to contain the fiscal deficit at 5.3%.

This move has decreased the total market borrowing by the government in the current fiscal to Rs.5.58 lakh crore from Rs.5.70 lakh crore as envisaged in the 2012-13 Budget.

The government has already borrowed Rs.3.70 lakh crore in the first-half ending September 30, which is 65% of the total planned borrowing. The front-loading of borrowing was done as part of its strategy to make available capital to the private sector in the last six months of 2012-13.

In November 2012, the fiscal deficit projection for the current financial year was raised to 5.3%, from 5.1% estimated in Budget.

The health of the government exchequer has improved as the government has managed to generate around Rs. 21,500 crore from PSU stake sales as against a fiscal target of Rs. 30,000 crore.

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