Bonds may be saying something.

"Prime Minister Narendra Modi yesterday hailed the next generation Goods and Services Tax (GST) reforms that will come into effect from 22 September 2025." "PM Modi said that with income up to Rs 1.2 million being tax exempt from this year, and the GST rate cuts effective from the first day of Navaratris, the common people and middle-class of the country will see a double bonanza." TOI. Mr Modi is known for his modification of facts. According to Congress leader Kapil Sibal, Mr Modi and his government "could only manufacture jumlas, statements and slogans." HT. A 'jumla' is an 'empty promise' (Mint). We also know that the state of Bihar is to hold elections to its assembly next month. wikipedia. Edelweiss CEO Radhika Gupta said that "while many professionals in urban India continue to describe themselves as middle class the actual income range for that group is much lower - between Rs 500,000 and Rs 800,000 annually." Only "about 100 million people earn the equivalent of $12,000-$14,000 (about Rs 1.056 million-Rs 1.232 million) annually." ET. Which means a very small fraction of the population will get the benefit of income tax exemption up to earnings of Rs 1.2 million, certainly not the middle class. GST started in July 2017 and annual collections were increasing slowly as more businesses came into the tax net. Collections started to soar from 2021-22 as retail inflation increased prices year-on-year (rateinflation.com) reaching a peak of Rs 2.37 trillion in April this year (Tata Nexarc). Since GST is a percentage of the final retail price and since inflation compounds year-on-year, perhaps it might have been wiser to reduce rates when prices were rising as that might have compensated for the fall in revenue. "Rising bond yields and depreciating currency." "Both reflect underlying market scepticism about the soundness of our macro fundamentals." "Reflecting this new reality, bond market yields have risen while the rupee has fallen a little over 3% this year." Mint. The Reserve Bank of India (RBI) cut its policy rate by 50 basis points (bps) in June to 5.5% (Mint) but the yield on the benchmark 10-year bond is at 6.503% this morning (Investing.com). "Worries over the impact of steep US tariffs on Indian exports have kept the rupee under pressure over recent weeks," while "Bond yields have jumped sharply recently, as concerns over demand-supply mismatch come to the fore, with investors facing mark-to-market losses on existing holdings." ET. What this is hinting at is that falling tax revenue, both direct and indirect, may increase government borrowing. An oversupply of bonds to finance a higher fiscal deficit will result in lower prices and higher yields. Hence Mr Modi's unscheduled lecture to spend more on local goods during the festival season. Will people do so? And do they have the money?