As India is considered as a new manufacturing hub of the world, a robust corporate bond market is the need of the hour. Discuss (200 Words)
Refer - Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· According to Crisil, outstanding corporate bond market in India is expected to double and reach Rs 65-70 lakh crore by 2025.
· Further, the Indian bond market has been dominated by sovereign bonds and the corporate bond market has a smaller share (27 per cent ) during the last decade.
· This calls for a power shift since an efficient corporate bond market complements a sound banking system and provides an alternative source of finance to the real sector, diversifies risks (mitigating asset-liability mismatches), and reduces financial sector fragility.
· Financial literacy and education: According a survey conducted by Standard & Poor’s in 2015, over 76 per cent of adults in India do not even understand the basic financial concepts like interest rate, inflation, and exchange rate.
· Credit guarantee enhancement: As on date, credit guarantee fund scheme exists for MSMEs (Micro Small & Medium Enterprises) to extend collateral-free credit.
· Maintaining price stability: The government’s massive public debt needs to be gradually downsized for effective transmission of monetary policy in order to crowd in private investment. This will reduce inflation, and the cost of borrowing of the corporates, and lead to higher real returns to the investors.
· Functional autonomy: Stakeholders such as independent directors, and credit rating agencies should have functional independence to improve corporate governance.
Shiva 3 years
Please Review.
IAS Parliament 3 years
Good attempt. Keep Writing.
K. V. A 3 years
Pls review
IAS Parliament 3 years
Good attempt. Keep Writing.
Susmitha T 3 years
Please review
IAS Parliament 3 years
Avoid listing out points and explain them briefly. Keep Writing.
Manish 3 years
IAS Parliament 3 years
Good attempt. Keep Writing.
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