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Domestic Debt Market in India –Its Resilience in Funding Infrastructure

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  • Swamy, Vighneswara

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.

Suggested Citation

  • Swamy, Vighneswara, 2014. "Domestic Debt Market in India –Its Resilience in Funding Infrastructure," MPRA Paper 58345, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:58345
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    References listed on IDEAS

    as
    1. World Bank, 2006. "World Development Indicators 2006," World Bank Publications - Books, The World Bank Group, number 8151.
    2. John D. Burger & Francis E. Warnock, 2003. "Diversification, original sin, and international bond portfolios," International Finance Discussion Papers 755, Board of Governors of the Federal Reserve System (U.S.).
    3. Claessens,Stijn & Klingebiel,Daniela M. H. & Schmukler,Sergio L., 2003. "Government bonds in domestic and foreign currency: the role of macroeconomic and institutional factors," Policy Research Working Paper Series 2986, The World Bank.
    4. Mr. David Hauner, 2006. "Fiscal Policy and Financial Development," IMF Working Papers 2006/026, International Monetary Fund.
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    More about this item

    Keywords

    Domestic Debt; Debt Market; Infrastructure; Institutions; Growth;
    All these keywords.

    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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