Bond market development in India

Abstract

The bond market in India has just made a beginning and it has to go a long way. We cannot say it has been a success until, the market becomes very liquid and there is a participation from the retail investors as well. Percentagewise, govt. bonds still outnumber the corporate bonds in the Indian market. Govt. incentives and reforms are a certain welcome. Formation of future market and NSE initiatives for online trading are big plus. Reforms in the insurance and pension sector will further boost the corporate bond market in India. But like other market, what is worrying is that though big corporates are able to finance their debt via the bond market, smaller corporates find it difficult unless they offer high rate of interest. We can conclude by saying that a good beginning has been made and using the learnings from other newly developed markets (like South Korea and South Africa) we can soon reach at the level of the developed markets.