The gross market borrowings of states are estimated to jump by nearly 22% to Rs 4.5 trillion next fiscal. But if the states' net borrowings remain unchanged at 2.2% of GDP, and assuming that the nominal GDP grows by 11.2% in fiscal 2018, Icra expects net borrowings by the states to jump to Rs 3.8 trillion from Rs 3.4 trillion in fiscal 2017, he says. But the SDL redemptions are set to more than double to Rs 0.7 trillion in fiscal 2018 from Rs 0.3 trillion in fiscal 2017. Accordingly, the states' gross market borrowings will rise by nearly 22% to Rs 4.5 trillion in fiscal 2018 from Rs 3.7 trillion in fiscal 2017, he said. "The rise in borrowings of the states would exert an upward pressure on SDL yields in fiscal 2018.

Source: dna February 19, 2017 04:13 UTC