Under the plan announced late Tuesday, the government will sell Rs1.35 trillion of recapitalisation bonds. Photo: BloombergKuala Lumpur: India’s plan to pump $32 billion into state-controlled lenders to revive growth may spur a sovereign bond selloff on expectations of a widening fiscal deficit, analysts said. PhillipCapital said the infusion may inflate the fiscal deficit and push up yields. Under the plan announced late Tuesday, the government will sell Rs1.35 trillion of recapitalization bonds while banks will raise another Rs76,000 billion through “budgetary support” and from the markets. The government also announced plans to spend $108 billion on building highways in the next five years.

Source: Mint October 25, 2017 05:37 UTC