Govt cautious of unexpected spike in sovereign bond yields: Official

The Indian government is cautious about the "unexpected" spike in government bond yields and may take remedial action if necessary, a government official said on Monday.
 

"If (government bond) yields go beyond tolerance level, we will take appropriate remedial actions," the official said, without giving details.
 

India's 10-year benchmark bond yield was trading at 7.37%, up by over 20 basis points in the last month.

The government will show "progressive improvement" in lowering its overall debt in the next few years and bring its fiscal deficit below 4.5% of GDP by 2025/2026, the official said. He declined to be named because they were not authorised to speak to the media.
 

The government's receipts and expenditure are on track to meet the 5.9% fiscal deficit goal for the ongoing fiscal year, he added.
 

"There is not much to worry about (fiscal deficit) going off the mark," the official said.
 

However, the government will need to carefully plan its spending to hedge for unforeseen geopolitical issues, he said.

The government will also show "progressive improvement" in lowering debt, he added.
 

Capital expenditure by the federal government has crossed 50% of its budget estimate for FY24 at present, but receipts and expenditure were on track to meet 5.9% fiscal deficit goal, the official said.