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Below are Views On The fiscal deficit of 6.8 % of GDP for the next financial year By Murthy Nagarajan, Head-Fixed Income, Tata Mutual Fund

“The fiscal deficit of 6.8 % of GDP for the next financial year and additional borrowing of Rs 80,000 Crores in the current financial year is clear negative for bond markets. The Nominal GDP growth of 14 % targeted is realistic and the food corporation subsidy being included in the government borrowing  is positive in terms of disclosure and transparency of Budget. It will be upto RBI to aggressively intervene in the bond market to bring down the yields in long dated papers. If RBI does not show its firmness in controlling the bond yields, we may see 10 year yields moving towards the 6.25 %- 6.50 % levels.”

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