The Government on Monday cancelled Rs 12,000 crore bond auctions, lowering its market borrowing programme for the current financial year in its bid to contain the fiscal deficit at 5.3 per cent.
With this, the total market borrowing by the Government in the current fiscal would come down to Rs 5.58 lakh crore from Rs5.70 lakh crore as envisaged in the 2012-13 Budget.
"On review of the Government's cash position and funding requirement, it has been decided, in consultation with Reserve Bank of India (RBI), to reduce the government market borrowing through dated securities by Rs 12,000 crore for the current financial year," the Finance Ministry said in a statement.
The auction for dated securities, worth Rs 12,000 crore, scheduled on February 22 has been cancelled, it added.
The Government has already borrowed Rs3.7 lakh crore in the first half ending September 30, which is 65 per cent 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.
Finance Minister P Chidambaram had in November 2012 raised the fiscal deficit projection for the current financial year to 5.3 per cent, from 5.1 per cent estimated in Budget.
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