Prime Minister Narendra Modi’s government will seek to borrow Rs6.5 trillion in the fiscal year starting 1 April, according to the median estimate of 15 fixed-income strategists and economists before Thursday’s budget. That compares with the Rs6.05 trillion expected for the current year. Whereas falling oil prices and bond yields have benefited Modi since he took power in 2014, their steep ascent in the past year is posing a threat. “The outlook for government bonds is not good given the huge supply of debt and risks from elevated oil prices, above-target inflation and hardening global yields. The higher oil prices threaten to add to India’s inflationary pressures and weigh on its finances given the nation imports about three-quarters of its needs.

Source: Mint January 29, 2018 08:26 UTC