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India should emulate global best practices to develop a vibrant corporate bond market, which can play a pivotal role in helping garner investments to the tune of Rs 64 lakh crore that are needed to develop infrastructure in FY15-19, according to industry body CII.
The industry body had recommended that India needs to focus on some key measures like broad based development of government securities market, supportive taxation structure, uniform stamp duty, enhance institutional participation by re-visiting investment norms, institute a robust credit enhancement framework and strengthen bond holder protection mechanism.
"Indian economy is at a crossroads where development of corporate bond market is required for meeting the funding requirements of the industry and the economy. Thus, it becomes imperative to study the successful global models for benchmarking best practices and devising an implementable roadmap for the Indian economy," said CII Director General Chandrajit Banerjee.
"CII has studied the global best practices and models for development of corporate bond market with special emphasis on benchmarking global best practices for the Indian market and deriving policy solutions to guide the future reform agenda," Banerjee added.
Pointing out that for an emerging economy like India, Corporate Bond Market can play a pivotal role for financing infrastructure development, CII said: "We project investment requirement in infrastructure development to the tune of Rs 64.3 lakh crore during the period 2014-15 till 2018-19 and private sector will have to play a crucial role in achieving the desired goal".
The CII report analysed the models of both emerging and developed countries like Brazil, Chile, South Korea, China, Singapore, Japan and the United Kingdom, and noted that a variety of regulatory and market actions stimulated market growth in these economies.
