MUMBAI - Indian government bond yields ended higher on Monday, for a second consecutive session, as traders turned nervous about higher borrowing in the next financial year, while elevated oil prices also dampened sentiment.

The benchmark 10-year yield ended at 7.3283%, after closing at 7.3003% on Friday. The yield fell seven basis points last week, its biggest weekly drop in six.

"Higher gross borrowing is playing in the minds of market players, keeping bond prices under pressure," said Gopal Tripathi, head of treasury and capital markets at Jana Small Finance Bank.

"Also as this will be last full-fledged budget before the next parliamentary election, that can put fiscal deficit under stress due to some welfare measures."

India's federal budget is due on February 1, with focus on the government's fiscal consolidation path and borrowing plan. The country goes to elections in 2024.

Economists at Nomura predict gross borrowing at 15.5 trillion rupees ($190 billion) for the next fiscal, while Goldman Sachs has projected borrowing to jump sharply to 16.8 trillion rupees. Gross borrowing for the current financial year stands at 14.21 trillion rupees.

Market participants are also worried about higher state debt issuance along with central government bond sales, which will take the focus back on demand-supply dynamics, traders said.

Bond yields has eased last week after inflation in India and U.S. eased, but worries over supply have now taken centrestage, they added.

Meanwhile, oil prices rose, with the benchmark Brent crude moving higher in all five trading sessions of last week.

The benchmark Brent crude contract rose above $85 per barrel, and jumped 8.5% last week, biggest such move in three months.

India is one of the largest importers of the commodity, and its price has a direct impact on local retail inflation.

Inflation eased for second month in December, but stays close to the upper tolerance level of the central bank's aim. ($1 = 81.6725 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Nivedita Bhattacharjee)