New Delhi, Jan 30 (NationPress) As India prepares to present the Union Budget for 2026-27 in Parliament on February 1, investors are expected to concentrate on debt metrics, deficit outcomes, and anticipated borrowings for the forthcoming fiscal year to meet strategic goals, according to a report released on Friday.

The amount of borrowings will play a crucial role in influencing the bond markets, as indicated by a note from DBS Bank.

“Considering our fundamental calculations and deficit objectives, we anticipate that net borrowings for FY27 will increase to Rs 12 lakh crore (compared to Rs 11.4 lakh crore in FY26), which represents 73 percent of the expected deficit for the upcoming year. With redemptions projected at about Rs 4.5 lakh crore (accounting for potential switches), total gross borrowings are expected to reach a record high of Rs 16.5 lakh crore,” elaborated Radhika Rao, Executive Director and Senior Economist at DBS Bank.

The Economic Survey for 2025-26 provided a detailed evaluation of the economy, forecasting growth for FY27 to be between 6.8-7.2 percent, a decline from the 7.4 percent estimated for the current year, yet still above market expectations.

Geopolitical factors and global uncertainties were highlighted as key themes in the report, which explored three different scenarios reflecting varying levels of risk. While these dynamics pose identifiable threats to India, the Survey emphasized the necessity of fortifying domestic fundamentals to mitigate external shocks—acknowledging that the global situation could worsen.

According to the note, gross supply may decrease in the Budget if additional switches are implemented to extend part of FY27 maturities to longer durations, although this must be balanced against the current subdued demand for duration papers.

“Maturities for FY28 are projected at Rs 6 lakh crore, which may be reduced through switches in the upcoming year. A significant influx of supply could lead to further increases in INR bond yields, with the 10Y yield hitting a yearly peak of over 6.7 percent,” the report stated.

Additionally, the statistics agency released expert group recommendations for the upcoming revision of the CPI base year to 2023-24, replacing the current base year of 2011-12.

The first CPI release under the updated series is scheduled for February 12. This recalibration will decrease the weight of the food and beverages category (from 45.86 percent to 36.75 percent) and redistribute that weight towards services (excluding education), reflecting changes in consumption trends.

“Based on the new weightings, and if indices remain unchanged, the revised CPI may see a slight increase of 20-25 basis points, while the opposite effect would be observed during periods of heightened food inflation,” the report explained.