Photographer: Brent Lewin/Bloomberg

Indian bond traders’ worst fears may be realized this week if Prime Minister Narendra Modi’s government announces a further increase to its mammoth borrowing plan.

Traders expect the government to lift its borrowing estimate for the October-March period to six trillion rupees ($81.5 billion) from the existing 5 trillion rupees, according to 10 out of 16 traders in a Bloomberg survey. The timing for this increase couldn’t be worse as the Reserve Bank of India is set to keep its policy rates on hold on Thursday amid a persistently high inflation.

“With no rate cut baked-in, the only thing the market is waiting for is the borrowing calendar, and cues in the RBI policy,” said Lakshmi Iyer, chief investment officer debt at Mumbai-based Kotak Mahindra Asset Management Co. “Additional borrowings will definitely spook the market if there isn’t a game plan to support extra