Centre’s cash position improves, defers bond auction

The Centre's fiscal deficit has shown the first signs on New Years' eve that it is on the mend. On Monday the government informed the debt markets it was postponing a Rs 12,000 crore auction of dated securities as its cash situation has improved.

A finance ministry release said, "In view of the cash position of Government of India... the auction of dated securities for Rs 12,000 crore scheduled in the week ending January 4, 2013 has been shifted to the week ending February 22, 2013."

While the announcement came after the close of the market, the yields on the 10-year benchmark government paper had declined in the day.

The improvement in the cash balance is evident in the cumulative accounts for April to November released in the day. The fiscal deficit at Rs 4.13 lakh crore is 80.4 per cent of the Budget Estimates but it is slightly better than the deficit position last year when it was 85.6 per cent of the Budget target.

The government this fiscal has taken ways and means advance only once from the RBI till the end of November. Last year it was in the red for all months till November.

The improvement is mainly on account of massive tightening on the expenditure front, said Saugata Bhattacharya, senior vice president, Axis Bank. Total expenditure is Rs 8.67 lakh crore or 58.2 per cent of the full fisc target. This is less than the 60.5 per cent logged a year ago.

The revenue deficit touched 91.2 per cent of the full year target by November to amount to Rs 3.19 lakh crore, as per data released by the Controller General of Accounts on Monday. This is the same as the 91.3 per cent revenue deficit clocked between April and November 2011.

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