Repo rate is the rate at which the RBI lends money to commercial banks. It is used by monetary authorities to control inflation.
Sustained foreign fund outflows and firm crude oil prices further dented investor sentiments, forex traders said.
The 0% interest schemes were banned by the RBI 10 years ago, but it remains on offer even now.
In the last full budget before a 2024 general election, Prime Minister Narendra Modi's government is expected to focus on lowering the fiscal deficit rather than extra spending.
The fiscal health of the states has improved from a sharp pandemic-induced deterioration in 2020-21 on the back of a broad-based economic recovery and resulting high revenue collections.
The auction of the debt instruments will take place through the e-Kuber portal at the office of the Reserve Bank of India at Fort, Mumbai, on December 27.
The Narendra Modi-led BJP government had demonetised Rs 500 and Rs 1,000 currency notes in 2016.
In a tweet, the finance ministry said the steps taken by the government has helped in bringing inflation below the RBI's tolerance level.
Reserve Bank of India Governor Shaktikanta Das also announced the bi-monthly monetary policy on Wednesday.
The Reserve Bank of India (RBI) will come out with its next bi-monthly policy review on December 7 at the end of the three-day meeting of the Monetary Policy Committee (MPC) beginning Monday.