Archive · 13 Aug 2025
G-Sec Yields Cross 6.5% Amid Tax Collection Dip
The interest rate on Indian government bonds hit a new high, crossing 6.5%.
This happened because tax collection is down, possibly leading the government to borrow more money.
The central bank stepped in to keep bond rates from going up too much.
Experts think that the next interest rate cut might be delayed because of sticky inflation and the US putting tariffs on Indian goods, which could slow down the economy.
10-year benchmark G-Sec yield rose above 6.5% for the first time since May 2025.
Net direct tax collection fell by 3.95% year-over-year until August 11.
The RBI intervened in the G-Sec market to stabilize yields.
Market players suggest potential delays in further rate cuts.
US tariffs on Indian exports pose economic challenges, potentially slowing growth.
- Who
- The bond market, the Reserve Bank of India (RBI), and the government.
- What
- The rise of 10-year benchmark G-Sec yield above 6.5%.
- When
- The yield breached 6.5% on Wednesday, August 13, 2025.
- Where
- India
- Why
- Due to a dip in net direct tax collection, influencing expectations of increased government borrowing and impacting market dynamics.
- G-Sec Yield Breached
- 6.5%
- Date of Breach
- August 13, 2025
- Tax Collection Drop
- 3.95% year-over-year
- Core Inflation
- Around 4%
- RBI Intervention
- Yes, in the G-Sec market
Sources
Net direct tax mop-up falls nearly 4% this fiscal
Direct tax receipts fall 4%, annual target looks difficult
'Stockmarketification' at play? Shankar Sharma warns after tax collections slip
Higher refunds, sluggish non-corporate mop-up push net direct tax collections into negative growth at ₹6.64 lakh crore
Net direct tax mop-up falls 4% to Rs 6.64 lakh cr
How GST changed import duty revenue for states—no blame, more profit
15th Finance Commission's tax share rejig boosts Bihar, Maha; Karnataka hit
