Business

Need for a vibrant bond market

MUMBAI: Finance Minister P Chidambaram on Friday said that corporate bonds would play a critical role in the growth of the economy, but absence of a vibrant market in the country for such a security was proving to be a major handicap.

Speaking at a function to launch the country’s first electronic trading system for corporate bonds, Mr. Chidambaram said, “We need $500 billion over the next five years to develop infrastructure. But absence of a vibrant bond market is a major handicap,” he said.

The Finance Minister pointed out that at present, it was mainly the government-owned companies that were issuing bonds and the portion of bonds issued by the corporates was meagre.

The Government, however, had taken a series of measures to boost the corporate bond market and many more measures were in the pipeline.

“The Securities and Exchange Board of India is finalising draft regulations on corporate bonds. It is planning to simplify the issuance and listing of bonds,” Mr. Chidambaram said.

The Minister said that there was a need to develop a seamless pan-India market for corporate bonds, but there were different stamp duty rates imposed by different State governments. — PTI

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