)
Sticking to debt sales could dash recent market hopes the government would cancel at least one of the two upcoming auctions given the build-up in the government's cash balances with the Reserve Bank of India.
The inclination to go ahead with the combined Rs 22,000 crore in debt sales scheduled for the fiscal ending in March is reinforced by a cash payout worth Rs 25,000 crore the government must make to oil companies over the next month and a half, the sources said.
Although neither the RBI nor the government revealed cash balance levels, analysts said recent spending cuts should have raised the amount of state money held with the central bank to around Rs 80,000 crore.
"Borrowing is linked to the deficit. There could be a temporary mismatch in cash balance. But that does not mean we will cut borrowing," said one official, who was not authorised to speak to the media and declined to be named.
"The decision to cut the borrowing depends on what happens to the deficit. Unless the deficit comes down, you cannot cut borrowing."
The government is scheduled to borrow another Rs 22,000 crore in two auctions by February 22.
