Goldman sees debt market at $1.5tn by 2016

The Indian corporate bond market with gradual pace of reforms may see a roughly a four-fold rise in size about $ 1.5 trillion by 2016, according to Goldman Sachs report on the debt market.

Within this market, which is crucial for raising long term resources for infrastructure projects, the private bonds segment could grow nearly six fold from $ 100 billion to $ 575 billion.

"The virtual absence of a private-sector debt market in India adversely affects two issues that will help underpin the country's future economic growth""borrowers' access to long-term funds and lenders' ability to distribute risks across the economy and across time", Tushar Poddar, vice president for Asia economic research, said.

India now has a chance to capitalise on a favourable domestic and external environment in order to push ahead with reforms to promote the maturation of the domestic debt capital market. The government's ambitious infrastructure spending plans may also act as a catalyst.

The report titled: Bonding the BRICs (Brazil, Russia, India and China): Big Chance for Indian Debt Capital market said a range of reforms necessary for the growth of debt market can be divided into two sets. The easier reforms involve improving the functioning of the marketplace itself.

The progress on this front can help to build support and momentum for the more complex and politicised second set of reforms, which require legislative changes in the areas of pensions, insurance and banking.