No extra borrowings now, says FinMin source

The government did not plan to issue cash management bills or borrow extra from the bond market as of now, a senior finance official said today.

“Cash management bills are used in case of any temporary cash mismatch, while auction route is used to fund the government’s fiscal deficit. The use of the two instruments depends on the nature of the problem. As of now, we don’t see any of these problems, so we are not contemplating their use,” the official said.

Following these comments, the 10-year benchmark 6.35 per cent, 2020 bond moved up around 16 paise to Rs 90.30.

The government has already completed its total gross borrowing of Rs 4.51 lakh crore for the current fiscal ending March.

The bond market is anticipating extra borrowing in the current financial year, as the much-awaited 3G spectrum auction has not materialised this year. The government was expecting Rs 35,000 crore in revenues from the auction.

Earlier this year, the government had announced the nomenclature of cash management bills.