The G-Secs auction – scheduled for February 11 – was also cancelled.
New Delhi: The Reserve Bank of India has canceled an auction of government securities (G-Secs) worth Rs 24,000 crore scheduled to be held on 18 February. “In consideration of the cash situation of the Indian government India, it has been decided, in consultation with the Reserve Bank of India, to cancel the auction of all securities scheduled to be held on February 18, 2022, according to the release schedule of September 27, 2020. 2021, for securities dated in the second half of the current fiscal year 2021-22”, the Finance Ministry stated in a notice issued on Monday.
The G-Secs auction – scheduled for February 11 – was also canceled after bond yields surged following the announcement of a record borrowing program earlier this month.
The government plans to borrow a record Rs 11.6 lakh crore from the market in 2022-23 to meet spending requirements to support the economy affected by the Covid-19 pandemic.
This is almost Rs 2 lakh crore higher than the current Year Budget estimate of Rs 9.7 lakh crore.
Even so, total borrowing for the next financial year will be the highest ever at Rs 14.95 crore compared to a Budget Estimate of Rs 12.05 (BE) for 2021-22.
However, the total loan amount has been adjusted down by almost Rs 2 lakh crore to Rs 10.46 lakh crore for the current financial year thanks to the improvement in revenue.
Total borrowing includes repayment of past loans. The government raises money from the market to finance its fiscal deficit through securities and dated Treasury bills.
