Given that yield on 10-year government securities increased around 150 basis points in last few months. We ask the experts to share their views on its impact on the economy.
Mahendra Jajoo, head — fixed Income, Mirae Asset Global Investments (India) Pvt. Ltd
Over the last few months, bond yields have risen due to unfavourable macro developments on domestic and global fronts. Domestically, consumer price index (CPI) inflation rose to breach the 5% mark, driven mainly by higher food, fuel and housing prices.... Alongside, post implementation in July 2017, Goods and Services Tax is taking much longer in stabilizing.... This led to lower than estimated revenue, necessitating widening of fiscal deficit to 3.5% of GDP for FY18 as against the original target of 3.2% and higher than budgeted market borrowings. Further, fiscal deficit target for FY19 has been set at 3.3%, higher than FRBM milestone.
