High bond outputs, making loans priceless in the midst of low interest rates: FM Nirmala Sitharaman

The Indian Finance Minister Nirmala Sitharaman said on Friday that the rising bond returns had made loans expensive for the government at a time when interest rates were low.

The 10-year-old Benchmark Bond by India rose with 19 basic points in August, the largest monthly peak in three years. The yield was on Friday at 6.4651%, compared to the previous closure of 6.4934%.

The reserve Bank of India last month kept its most important REP rate stable at 5.50%, after having cut it with 100 basic points so far in 2025.
“It is not affordable when the interest rates are otherwise low, the bond returns that become untenably high has a major influence on the government,” Sitharaman said in an interview with news channel CNN-News18.

Earlier this week, the federal government reduced taxes on hundreds of consumer articles, which, according to them, would lead to a loss of turnover of 480 billion rupees ($ 5.49 billion), causing investors’ concern about the assets of New Delhi to achieve his tax shortage.

Sitharaman said that the government will reach its tax shortage of 4.4% of GDP for the current financial year ending on 31 March without reducing its 11.21 Biljoen-Vroekie infrastructure expenditure plan. “The capital expenditure of the government will not fall. It will be completed as stated in the budget, as well as the tax deficit. This is the last point of my sliding path, I will stick to it,” Sitharaman said. Sitharaman also said that stock sales in Idbi Bank are expected to be closed in the current financial year. Last month, the country’s rejection secretary said that the government will invite bids for sales sales between October and December.

($ 1 = 87,5060 Indian rupees)