India’s gross market borrowing is estimated to hit Rs 12 lakh crore in fiscal 2021 - not only a whopping Rs 4.5 lakh crore higher than the previous fiscal’s – but the sharpest increase in any given year. 

If fiscal policy alone prevailed, that should push up the yield curve, including the yields on 10-year government securities (G-secs). But that hasn’t happened yet. Credit largely goes to Reserve Bank of India’s (RBI’s) extraordinary liquidity easing measures such as open market purchases, ‘Operation Twist’, and encouraging banks to buy G-secs.

But in the second half, will things be any different? Will it be back to fundamentals? Or will the unconventional measures continue to hold sway?

Read our latest Quickonomics for our revised outlook on yields, and understanding the factors behind the same.