Markets can humble even the mighty Trump

Just before a budget was about to be presented by the Modi government some years ago, I received a request to see the finance ministry's top brass. The then chief economic advisor's statements about the upcoming budget's likely estimate for the fiscal deficit had left the Reserve Bank of India (RBI) and the finance ministry worried. The ministry wanted the estimate reported accurately. I didn't see the urgency, given the budget was to be presented in a day's time, but I understood their anxiety and filed the story, as requested. On the budget day, I was in the Lok Sabha press gallery to cover the finance minister's speech. He read out the fiscal deficit numbers. To my relief, the officials hadn't misled me. As I was leaving the Parliament building, one of them walked up to me and said, "The RBI Governor has just messaged the Finance Secretary: 'The bond markets are saluting you'." No government can shrug off sharp movements, especially sell-offs, in the bond market that it uses to finance itself. Not in India, where the government exercises far more control over the bond market than in other countries, since it owns several of this market's players and holds influence o

This article was originally published on May 01, 2025.