A gloom-and-doom scenario: Why Bond market loves India's tax mess

The Reserve Bank of India has told banks that if they buy another 3 trillion rupees ($41 billion) of government bonds, they can park them in a bin that doesn't have to be marked to market

Emerging markets will exit the coronavirus pandemic with a heavy fiscal load. Many will see their public debt balloon; some will also have to carry a bigger interest burden. A smaller group may need costly repairs to broken banks. 
 

India may be hit on all three counts, plus have an additional problem: a consumption tax in shambles. It’s a gloom-and-doom scenario, but the bond market loves it. 

The market is pleased because it’s getting concessions from panicky authorities. The Reserve Bank of India has told banks that if they buy another 3 trillion rupees ($41 billion) of government bonds, they