Domestic Debt Market in India – Its Resilience in Funding Infrastructure

24 Pages Posted: 4 Sep 2014

Date Written: September 4, 2014

Abstract

As India is projected to be the world’s most populous country by 2025, the growing needs of the economy, with expanding population, in the recent years have placed intense stress on physical infrastructure. In order to meet the deficit in the provision of infrastructure, mid-term appraisal of the twelfth plan suggests that to attain 9 percent real Gross Domestic Product (GDP) growth rate, infrastructure investment should be on average almost 10 percent of GDP during the Twelfth Plan which translates into INR 65795 billion (about One trillion dollar). Though there has been a progressive involvement of the private sector in infrastructure investments, the government has to play a proactive role in developing a well-structured platform for raising the required investments in Indian infrastructure. Given the huge demand of US$ 1 trillion for infrastructure investments during the 12th plan period, there is a greater emphasis on creating a domestic debt market with special focus on bond market as an alternate source of funding for bank finance, which is faced with myriad problems of stress assets, asset restructuring, etc.

Keywords: Domestic Debt, Debt Market, Infrastructure, Institutions, Growth

JEL Classification: D53, H54, H63, O43

Suggested Citation

P.M., Vighneswara Swamy, Domestic Debt Market in India – Its Resilience in Funding Infrastructure (September 4, 2014). Available at SSRN: https://ssrn.com/abstract=2491420 or http://dx.doi.org/10.2139/ssrn.2491420

Vighneswara Swamy P.M. (Contact Author)

IBS-Hyderabad ( email )

62, Nagarjuna Hill
Panjagutta
Hyderabad, TX AP 501504
India

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