Focus on bond market after Interim Budget shows ballooning govt borrowing

The bond market is bracing for unrelenting supply of government debt papers in the next fiscal as the Centre plans to borrow an astronomically high Rs 7.1 trillion on a gross basis, even as fiscal deficit as a percentage of gross domestic products (GDP) remains the same between the current fiscal and the next. 

Including provisioning for buyback of Rs 50,000 crore, however, the market borrowing pushes up even further to Rs 7.6 trillion, which is much higher than the market had estimated. The steep hike in gross borrowing is not because the government’s fiscal deficit has suddenly widened on