Key Points
Spending by India's central government is likely to remain slower for a few more months, which may prompt more steps to infuse cash into the banking system, two sources familiar with the matter said on Tuesday...
Over the past three weeks, the government has announced three buybacks of short-term securities along with a change in the planned treasury bill borrowings for the next six weeks...
We see slow pace of spending till about August, said one of the sources, a government official who declined to be named as he is not authorised to speak to the media...
India's ongoing six-week long national election has led to slower government spending, leaving the banking system facing an average liquidity deficit of 1.2 trillion rupees ($14.41 billion) so far in May...
While the government could choose to cut borrowings, this is last option, said a second source aware of the government's thinking, adding that options such as buybacks may be preferable for now...
