Soaring redemptions of government securities and 364-day treasury bills resulted in a 2.33 per cent fall in net borrowings of the Centre at Rs 91,821 crore (Rs 918.21 billion) till January 9, according to PNB Gilts.

With only two months to go in this fiscal, the government's net borrowings so far amounted to 85.66 per cent of the budgeted Rs 1,07,194 crore (Rs 1,071.94 billion) for 2003-04, it said.

The net borrowings stood at as high as Rs 94,021 crore (Rs 940.21 billion) in the previous year period.

Redemption of G-secs and 364-day T Bills surged by over 36 per cent to Rs 53,151 crore (Rs 531.51 billion) till the latest reported period as compared to Rs 39,012 crore (Rs 390.12 billion) in the previous year.

Gross borrowings (excluding redemptions), however, was on a higher scale, rising by about nine per cent to Rs 1,44,972 crore (Rs 1,449.72 billion) till January 9, thus completing over 87 per cent of the budgeted Rs 1,66,230 crore (Rs 1,662.30 billion) for this fiscal. The gross borrowings stood at Rs 1,33,033 (Rs 1,330.33 billion) in the previous year period.

Pointing out to the scheduled Rs 10,000 crore (Rs 100 billion) mop up through G-secs and 364-day T bills, PNB Gilts said there was no liquidity concern and inflation was likely to start declining in the next 2-3 weeks.

However, the wholesale price index inflation at 31-week high of 5.75 per cent for the week ended December 27 mainly led to increase in energy prices. The Reserve Bank of India also has apprehensions on maintaining the benign level due to contagious effect of rising global prices of commodities and uncertainties in the international oil prices.