The record revenue from auction of 3G airwaves could cheer up the bond market battling a spate of government debt sales.

The Centre?s market borrowing could be lower than projected this fiscal on account of 3G spectrum revenue to the exchequer, which, at Rs 67,719 crore, is nearly double the budget estimate of Rs 35,000 crore.

Ministry of statistics and programme implementation secretary Pronab Sen on Wednesday said the government borrowings could be reduced by about Rs 35,000 crore in case the government raises Rs 70,000 crore or thereabouts from 3G spectrum. ?Almost certainly,? Sen told Reuters when asked whether funds raised through the third-generation auction would lower government borrowings in the current fiscal year.

Finance minister Pranab Mukherjee said on Tuesday the enhanced revenue would give him more ?elbow room? to pare the fiscal deficit to 5.5% of GDP in 2010-11 as compared to 6.7% in 2009-10.

?I am happy particularly because the calculations which I made, and the budgeted figure that I took, was Rs 35,000 crore. Now if I get Rs 60,000 crore plus, naturally, it will provide me with little more elbow room,? finance minister Pranab Mukherjee said in the Idea Exchange programme of The Indian Express on Tuesday.

The auction for 3G mobile telephony licence that lasted 34 days ended on Tuesday, left Rs 67,700 crore in the government kitty. Bidding for Broadband Wireless Access spectrum would commence in two days?which would bring in additional revenue.

The government plans to borrow Rs 2.87 lakh crore between April and September and a total of Rs 4.57 lakh crore in 2010-11. The finance ministry decides its borrowing schedule in consultations with the Reserve Bank of India.

The yield on the benchmark 10-year government bond fell slightly to 7.44% on Wednesday from 7.5% on Tuesday. Stocks also tumbled with the benchmark BSE Sensex falling 467 points on Tuesday, as Germany?s efforts to curb market volatility tripped stocks worldwide.

However, finance secretary Ashok Chawla said last week the government?s market borrowing plan for the first half of the current fiscal year was not expected to change. The 3G auction money would not have any impact on the government?s borrowing plans at this point, Chawla had said.