Corporate Bond Market in India: Obstacles and Opportunities

Abstract

Capital markets are the lifeline of an economy which spurs economic development and growth in the real sector by directing capital to creditworthy borrowers. Indian capital markets have significantly grown in the last decade. India's equity markets are quite developed, its G-sec market is also fairly large but its corporate bond market is lacked in both size and liquidity.A deep and liquid bond market augments financial savings and helps match the savers to the borrowers in an efficient manner and is quite important especially in recent times when India needs huge amount of funds to meet its infrastructural requirements. The paper studies the major obstacles which restrict the growth of corporate bond market in India.