Bonds on watch

Inclusion in global indices would demand higher fiscal standards

The Indian government securities could be included in the FTSE Russell Emerging Markets Government Bond Index (EMGBI). This would encourage the entry of fresh overseas funds at a time when the government is borrowing huge sums to bridge the fiscal deficit. The inclusion in a major global index will also impact the exchange rate and the yield curve of Indian bonds. It may help to deepen the illiquid secondary market for bonds, as well. FTSE Russell, a subsidiary of the London Stock Exchange Group, maintains many globally benchmarked equity and fixed income indices. On Monday, in its semi-annual country classification