Rising India rates to upset PM Modi's Budget math on small savings

India last week proposed a lower-than-expected market borrowing program, as part of a plan that sought to bridge its budget deficit by boosting reliance on the nation’s small savings pool.  
 

The decision on Feb. 1 triggered the biggest drop in the benchmark 10-year bond yields in over two months. Bonds have since pared their gains, with the budget math increasingly looking daunting as commercial interest rates soar tracking a tight monetary policy.

The government pledged to shrink its budget gap to 5.9% of gross domestic product in the year starting April 1 from 6.4% this year. While Prime Minister Narendra