Indian bonds face a familiar foe with elections just round the corner

Investors have turned skittish about the health of India's finances amid signs that Centre is ready to sacrifice fiscal discipline as it weighs an aid package to appease farmers, a key voting block

After posting the best quarter in four years, Indian bonds are pitted against a familiar foe: likely record debt sales by the government to finance populist measures before national elections due by May.

Prime Minister Narendra Modi’s administration may announce Friday plans to borrow 6.4 trillion rupees ($90 billion) for the next fiscal year in its budget, according to the median estimate of 15 strategists in a Bloomberg News survey. That compares with a revised 5.35 trillion rupees for the current year.

Investors have turned skittish about the health of India’s finances amid signs that the government is ready to sacrifice fiscal