Speaking to CNBC-TV18, Anand said the gross borrowing number of ₹17.2 lakh crore may create some immediate pressure on yields, but the RBI’s track record suggests the supply will be managed smoothly over time.
“I think it’s a little higher than expected, but one would imagine that the RBI will manage, as they have every year, through a mix of OMOs and switches,” Anand said.
Yields may rise on Monday, but adjustment likely
Anand acknowledged that the borrowing figure could trigger a knee-jerk reaction in bond markets when trading opens after the Budget.
“Yes, the gross borrowing programme is a bit of a concern… in the very short term, it’s a little negative, and you will probably see yields going up a little bit on Monday,” he said.
However, he added that the impact should stabilise as markets absorb the net borrowing numbers, which he described as “not alarming”.
Fiscal math at 10% nominal GDP seen as credible
Beyond the borrowing headline, Anand said the broader fiscal framework presented in Budget 2026 looks realistic.
“More importantly, the fiscal math at 10% nominal looks very credible. And I think there is a little bit of leeway in terms of non-tax receipts as well,” he noted.
Banking Committee signals major reform push
One of the most significant structural announcements in the Budget was the government’s move to appoint a Banking Committee to recommend reforms, potentially including changes to ownership rules and voting rights.
Anand called these issues central to the evolution of India’s banking sector.
“I think those are the two big ones… there’s been a lot of debate around ownership of banks here in India, and this disconnect between ownership and voting rights,” he said.
According to him, the committee’s work could define “how the banking industry in India will get built over the next 25 years.”
Foreign deals hint at regulator’s shifting stance
Anand also pointed to recent high-profile transactions that suggest regulators may already be open to rethinking long-standing ownership structures.
“The SMBC–Yes Bank transaction and the Emirates–RBL transaction are, in a sense, showing you the way that the regulator is thinking about these issues,” he said.
Market participants believe that clearer rules on ownership and voting rights could unlock more consolidation, strategic investments and foreign participation in the banking system over the coming years.
Mutual fund dividend tax tweak a minor negative: Nirmal Jain
On the investor taxation front, Nirmal Jain, Founder of IIFL Group, weighed in on the Budget proposal that disallows interest offset against dividend income from mutual funds.
Jain said the change could marginally raise tax liability.
“It’s a little negative, because the 20% that was allowed earlier might increase tax liability a little,” he said.
However, he downplayed its broader market impact.
“In the overall scheme of things, this is not a significant mover or shaker in the market,” Jain added.
Key market focus: Borrowing, yields and reform roadmap
With Budget 2026 now announced, investors will closely track the bond market’s response to the borrowing programme, RBI’s liquidity operations, and the direction of banking reforms proposed by the newly formed committee.
While yields may see a short-term uptick, bankers believe credible fiscal assumptions and a reform-oriented roadmap could support stability over the medium term.
