The creation of a robust bond market is necessary to boost infrastructure development in the country. On this front, Union Budget 2020 has not disappointed. Both demand and supply-side measures have been proposed, including higher investment limits, concessions on dividends and capital gains, withholding on interest payment abroad, easier norms for listing, and wider scope for credit default swaps (CDS), along with netting of financial contracts. Throughout the developed world, the debt market is more sophisticated than the equity market. India was the only exception to the rule, but this will now, hopefully, change. Creating a strong bond market is also necessary to support equities, and the securitization of corporate debt instruments, including a secondary market for corporate loans, would lead to risk transfer, diversification, and improved liquidity in the system.
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