Finance Minister Nirmala Sitharaman will present the Union budget at 11:00 a.m. IST. The government is likely to keep its gross market borrowing below 16 trillion rupees ($195.54 billion) for the next year as it does not want to destabilise the bond market with negative surprises, two sources close to the deliberations said. STCI Primary Dealer said any gross borrowings below 16 trillion rupees will be taken as a positive by the market.
Sentiment has also improved as the government will sell 120 billion rupees of a new 10-year paper on Friday, which will replace the existing benchmark in the coming weeks. This paper is likely to witness a strong demand and lower cutoffs compared with the prevailing 10-year yield, and the yield curve typically moves in alignment with the change in the 10-year bond yield, traders said. Meanwhile, the finance ministry's annual Economic Survey, released on Tuesday, forecast a growth of 6% to 6.8% year-on-year in the next fiscal, down from 7% projected for the current year. The emphasis on fiscal consolidation also suggests that a smaller fiscal deficit target for FY24 is likely despite a busy upcoming political calendar, Nomura said. ($1 = 81.8250 Indian rupees) (Reporting by Dharamraj Dhutia; Editing by Sohini Goswami)
