This $22-bn below-the-radar govt funding is spooking India's bond market

If the 10-year yield stays elevated despite slowing growth and inflation, high real long-term interest rates will further depress private borrowers' sentiment

India’s economy is slowing, inflation is sputtering and the central bank is cutting interest rates. But the cost of long-term money is refusing to budge. The reason, in a single word: elections. Polls will be called any day now. Prime Minister Narendra Modi probably would have liked to make his re-election bid with less distress in the farm economy and a better jobs track record. If he hadn’t scored an own goal by banning 86 percent of the country’s cash overnight, he might even have succeeded. Officially, Modi will end the fiscal year on March 31 with a deficit of