Govt to issue cash management bills to manage cash mismatch

22 Jul 2011 Evaluate

The Finance Ministry reviewed the cash position and market borrowing of the government on July 21 and in its statement said that the government will manage temporary mismatches in cash flows by issuing cash management bills (CMBs) and will not change the amount it plans to borrow via dated securities from the market between April and September.

The finance ministry said, “It has been decided that there will be no change in the amount of market borrowing through dated securities with reference to the first half (April-September 2011) borrowing calendar published earlier”.

“However, the Government of India in consultation with the Reserve Bank of India has decided to shift the auction of dated securities scheduled in the week ending September 23, 2011 to week ending August 19, 2011 to modulate the cash flows”, finance ministry’s note added.

The government has borrowed around $5.8 billion or Rs 260 billion via CMBs since late-June due to increase in the tax refunds, which has led to mismatch in government’s cash flow. However, the government says that the mismatch between cash flows is temporary and it should improve following the moderation in tax refunds.

But on the other hand, traders view issuances of CMBs as indication of mismatch between government’s revenue and expenditure, which may lead government to miss its borrowing target for the current financial year. Government is set to sell bonds worth around $56.2 billion or Rs 2.5 trillion in the first two quarters of current financial year and it is also planning to borrow around Rs 4.17 trillion in the current fiscal year. Experts view that it would be slightly negative in terms of the fact that there would clearly be more cash management bills so that takes away some amount of demand from the system.

Increasing subsidies bills are viewed as threat to government’s fiscal target for the current financial year. In the 2011-12 budget, government had budgeted around $1.34 trillion for spending on major subsidies. The fuel subsidy bill was budgeted at around $5 billion, with assumption of international crude oil prices to be less than $100 per barrel, which is at present more than $118 per barrel. However, international crude oil prices are showing signs of moderation.

Experts anticipate that the government will increase its market borrowing by $300 billion to $700 billion, depending upon the government’s performance on current financial year. However, last week, Finance Minister Pranab Mukherjee had said that the government would not increase its borrowing for the current fiscal year even as higher commodity prices inflate its subsidy bill.

About MoneyWorks4Me

MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

Our Vision

To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.

What Makes MoneyWorks4Me Different

Fiduciary-first advisory model.
As SEBI-registered IAs, we are legally and ethically bound to act in the best interests of our clients. We do not sell or distribute any financial products. This ensures our guidance is 100% unbiased and conflict-free.
Deep fundamental research + robust valuation discipline.
Built on more than 15 years of equity research, our framework combines quality assessment, intrinsic value estimation, and a sensible margin-of-safety approach.
Process—not predictions.
We don’t rely on guesswork or market timing. Instead, we focus on asset allocation, risk management, and long-term compounding.
Technology + Human Intelligence.
We believe a combination of both is essential for investing success. We constantly innovate and upgrade in-house tools, financial X-rays, and portfolio analytics so that our team of analysts and advisors are equipped with the best.
Partner with Clients.
We follow a DIWM (Do-It-With-Me) approach where we partner clients in setting goals, financial planning, educating on our investing process and share decision-enabling resources transparently with our clients who retain control on execution.

Our Approach: Ensuring compounding work its magic on client portfolio.

MoneyWorks4Me ensures this through:

Investing in stocks, mutual funds, debt, and gold
Quality-at-Reasonable-Price way of investing in stocks
Constructing Direct Stock Portfolios with Core, Booster, and Amplifier stocks
A Mutual Fund Portfolio that delivers consistent out-performance and meaningful diversification (low overlap)
Periodic review and rebalancing
Clear Buy-Sell-Hold, and Position-sizing frameworks

Name of the IA registered with SEBI:	The Alchemists Ark Pvt. Ltd.
Logo:
Trade/Brand Name of IA:	MoneyWorks4Me Investment Advisers
Brand Logo:
SEBI Registration Number:	INA000013323 Validity – May 16, 2019 – Perpetual
Registration:	Non-Individual
BSE Enlistment No:	1187
Address:	B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045
Compliance officer Details:	Name: Shrikant Jagtap Email: shrikant.jagtap@moneyworks4me.com Telephone: +919860359463 Address: Same as IA
Grievance Officer Details:	Name: Mukta Vaze Email: mukta.vaze@moneyworks4me.com Telephone: +91 98609 19463 Address: Same as IA
Principal Officer Details:	Name: Atharva Bhide Email: atharva.bhide@moneyworks4me.com Telephone: +91 91758 99463 Address: Same as IA
Standard Warning:	Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Disclaimer:	Registration granted by SEBI, enlistment with exchange and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.