Govt defers Rs 15k cr bond issue to contain fiscal deficit

A day after Coal India decided to give Rs 19,600 crore bonanza to the government, the Finance Ministry deferred Rs 15,000 crore bond auctions citing improvement in cash position.

"On review of the government's cash position and funding requirement, it has been decided, in consultation with RBI, to defer the auction of dated securities amounting to Rs 15,000 crore scheduled to be held on January 17," the Finance Ministry said in a statement.

The government issues dated securities to meet its borrowing requirements.

If the auction does not take place in the entire fiscal, the total market borrowing by the government would come down to Rs 5.64 lakh crore, from Rs 5.79 lakh crore as envisaged in the 2013-14 Budget. The net borrowing as per the budget was Rs 4.84 lakh crore.

Finance Minister P Chidambaram had earlier said that the 4.8% fiscal deficit is a red-line and it would not be breached under any circumstance in current financial year. The deficit was 4.9% in 2012-13.

Coal India yesterday declared a record 290% interim dividend which would fetch the government Rs 16,485 crore and another Rs 3,113 crore towards dividend distribution tax (DDT).

Besides the government has already asked the Ministries to curtail their non-plan expenditure and avoid spending rush in the January-March quarter with a view to keeping fiscal deficit under check.

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