Tweaks in insolvency norms, taxes to boost corp bond mkt

The government needs to enhance the effectiveness of the insolvency framework, simplify tax structures for bonds, and ensure greater coordination between agencies to boost investor confidence in corporate debt, the Economic Survey for 2025-26 said on Thursday.

- Subhana Shaikh

India's corporate bond market is growing at an annual rate of 12%, with FY25 seeing the highest-ever fresh issuances.

(ISTOCKPHOTO)

The regulators have taken several measures over the years to deepen the corporate bond market, but coordinated and phased reforms are needed to strengthen it and lower the cost of credit for Indian firms, the survey said.

“As the market deepens, towards a potential ₹100-120 trillion by 2030, intermediation costs should decline, particularly for the mid-market segment, where much of India’s manufacturing capacity and job creation will emerge,” it said.

Realising this vision demands sustained, coordinated policy focus, technological innovation, and regulatory harmonisation. However, financial deepening alone may not be sufficient to durably lower India’s cost of capital.