To keep the bond market calm and to maintain liquidity, the government on Friday said that it would reduce planned borrowings for the second half of the financial year. The also assured once again that aims to keep the fiscal deficit within the target of 3.3 percent of the GDP (gross domestic product).

The data released by the Ministry of Finance last week showed that the fiscal deficit for the financial year 2018-19 has reached Rs 5.91 lakh crore, that is 94.7 percent of the country's target for the year, between April and August.

The total gross borrowing for the financial year was budgeted at Rs 6.06 lakh crore from the markets, of which Rs 2.88 lakh crore was used in the first half of the year, leaving Rs 3.2 lakh crore for the October to March period. This is, however, reduced to Rs 2.47 lakh crore. It would mean, an average weekly borrowing amount of Rs 11,000 crore across 21 auctions.

The government intends to reduce the planned buyback and borrow more from small savings accounts. In addition, inflation-indexed bonds may be issued in the second half of the financial year. There is no target on how much money can be raised from these instruments, Subhash Garg, secretary in the Department of Economic Affairs said.

Short-term instruments like cash management bills are not expected to be used, while the outstanding treasury bills are expected to be Rs 17,000 crore by the end of the year, he added.