India FY25 fiscal savings unlikely to lead to borrowing cut, IDFC First Bank says

IDFC First Bank

09/01/2025 03:41

* India's FY25 fiscal deficit is estimated to be lower than
budget
but may not lead to any cut in borrowing via debt, IDFC First
Bank says
    * Says deficit estimated to be lower budget estimate by
around 830
bln rupees ($9.66 bln)
    * As a proportion of GDP, fiscal deficit is estimated at
4.7% vs
4.9% target
    * Still, government is not expected to cut supply, given the
strong demand for government bonds
    * "Given expectation of fiscal deficit being lower than
budget
estimate plus strong non-competitive collection, there could be
scope to cut t-bill issuance," economist Garua Sen Gupta says
    * She expects 10-year benchmark bond yield  IN067934G=CC  to
moderate to 6.50%-6.60% by March, from 6.76% current level

($1 = 85.9040 Indian rupees)

 (Reporting by Dharamraj Dhutia)
 ((dharamraj.dhutia@tr.com))