Government borrowing cost likely to fall, thanks to EPFO Borrowing costs for the Centre and the states may reduce in FY19 after India allowed the country’s biggest buyer of organized debt to buy less of corporate bonds and increase instead the allocations toward sovereign paper. The Employees’ Provident Fund Organisation (EPFO), which manages more than Rs 10 lakh crore in superannuation funds and is India’s largest domestic buyer of debt, now needs to allocate a minimum of 20 per cent of its portfolio to corporate bonds. That threshold, earlier set at 35 per cent, has been reduced because of the lack of availability of quality corporate paper in the country. “Based on the rates, we will take prudent and meritorious investment decision in the interest of stakeholders,” said VP Joy, the central provident fund commissioner. “We have larger limits now for government bond investments.”Two weeks ago, ET reported that the EPFO requested the Centre to alter investment guidelines applic