Indian Debt Market - A Current Paradigm

Amtul Majid Fazeelath

Abstract: Development of long term debt market is critical for the mobilization of the huge magnitude of funding required to finance potential businesses. India has ill-defined long term corporate debt market. Traditionally, bank finances along with equity market and external borrowings have been preferred funding sources. Large fiscal deficit, high interest rates, inadequate market infrastructure, lack of transparency, excessive regulatory restrictions on the investment of financial institution may have hamper the development of well-functioning corporate debt market. This paper deals with over view of the literature, steps that should be taken to reform the debt market and how a debt market can be used as a tool in transforming the Indian economy.

Keywords: debt - market, bonds, government securities