Modi's Farm-Price Move to Set Direction for India Bond Markets
- Decision on price setting is ‘elephant in the room’: I-Sec PD
- India prime minister tries to woo farmers before 2019 election
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India Prime Minister Narendra Modi is about to decide where to set support prices for farm products. And the bond market is waiting with bated breath as his call may well decide the next direction for interest rates.
Faced with a distressed rural class, Modi is out to woo farmers ahead of his re-election bid next year by promising to boost their incomes, including raising the prices of crops at which they sell to the government. The populist move is raising red flags for bond investors given its potential to jeopardize inflation management, not to mention the government’s coffers.