The recent move of FM to raise funds for infrastructure development through corporate bonds has finally given thrust to the nascent Indian debt market.
A well-functioning capital market is an important prerequisite not only for financial inclusion, but also for economic development and growth.
In a developed economy, banks and capital markets often complement each other, allowing movement of surplus funds to find their most productive use, and, in the process, freeing up capital and improving liquidity that allows banks to finance a larger number of players than was hitherto possible. Critical to such a movement is the existence of an efficient secondary market where previously issued financial instruments can be traded.
The retails participation is very low in debt market in India, compared to other countries and also compared to the equity financial market in the country. The tax benefits given to these investment options which are above section 80c 1 lakh limit is giving a growth pill to the debt markets.
Better late than never, we are in the game now… welcome the new Indian financial transformation.
