Japan’s Bonds Have a Message for India’s Budget
Health, education, climate change, and income security for the poor need to be part of India’s budget.
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The sharp selloff in Japanese bonds has a message for the India’s annual budget on Feb. 1. If vigilantes could bring such turmoil to a global safe haven on the hint of a tax slippage, they could rip apart any sign of fiscal recklessness in a developing economy faced with a chronic shortfall of resources to create jobs and provide welfare.
Volatility spiked last week in Japan’s bond market amid concerns politicians were losing the plot. Ahead of Feb. 8 elections, Prime Minister Sanae Takaichi has promised a two-year cut in the 8% consumption tax on food. The concession could unmoor expectations that government debt will settle at about 222% of gross domestic product by 2030, from about 230% now, the highest among advanced nations.