The Reports weighs the fiscal position of the government and suggests that the Union is firmly on the path to fiscal consolidation. Reporting that the Union G-sec borrowing programme for H2 is largely on expected lines, it says there is a sharp reduction in T-bill borrowing. SGS borrowing is set to compensate for some of this, but on balance, a shortfall is brewing over FY25 and FY26. The Report posits that this shortfall in SLR securities could crowd in corporate bonds. Based on all these factors, it concludes that the yield curve could steepen, with and overall downward bias for Union G-sec yields. SGS and corporate bond spreads too will remain in check
