Corporate Bond Market in India: A Report
New thinking on corporate bond market in India
Sanjay Banerji Krishna Gangopadhyay Ila Patnaik Ajay Shah
New thinking on corporate bond market in India
Foreword In the rush to produce urgent policy documents and briefing notes that any government has to do, it is easy to let matters that may not be quite as urgent to go unattended. However, the not-so-urgent often includes matters of great importance for the long-run well-being of the nation and its citizenry. Research papers on topics of strategic economic policy fall in this category. The Economic Division in the Department of Economic Affairs, Ministry of Finance, has initiated this Working Paper series to make available to the Indian policymaker, as well as the academic and research community interested in the Indian economy, papers that are based on research done in the Ministry of Finance and address matters that may or may not be of immediate concern but address topics of importance for India’s sustained and inclusive development. It is hoped that this series will serve as a forum that gives shape to new ideas and provides space to discuss, debate and disseminate them.
Kaushik Basu 29th May, 2011 Chief Economic Adviser
Disclaimer and Acknowledgements
The ideas presented in this paper are personal and do not reflect the views of the Ministry of Finance, Government of India. The authors thank Vimal Balasubramaniam for excellent research assistance and Debashish Mallick and Partha Sarathi Mukherjee for many helpful discussions on the subject. This paper was produced under the NIPFP-DEA Research Program. The authors are grateful to seminar participants at the Ministry of Finance for many insightful comments and suggestions.
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New thinking on corporate bond market in India
Table of Contents
Executive Summary............................................................................................................................. 3 1. 2. 3. Structure of the paper
Sanjay Banerji Krishna Gangopadhyay Ila Patnaik Ajay Shah
New thinking on corporate bond market in India
Foreword In the rush to produce urgent policy documents and briefing notes that any government has to do, it is easy to let matters that may not be quite as urgent to go unattended. However, the not-so-urgent often includes matters of great importance for the long-run well-being of the nation and its citizenry. Research papers on topics of strategic economic policy fall in this category. The Economic Division in the Department of Economic Affairs, Ministry of Finance, has initiated this Working Paper series to make available to the Indian policymaker, as well as the academic and research community interested in the Indian economy, papers that are based on research done in the Ministry of Finance and address matters that may or may not be of immediate concern but address topics of importance for India’s sustained and inclusive development. It is hoped that this series will serve as a forum that gives shape to new ideas and provides space to discuss, debate and disseminate them.
Kaushik Basu 29th May, 2011 Chief Economic Adviser
Disclaimer and Acknowledgements
The ideas presented in this paper are personal and do not reflect the views of the Ministry of Finance, Government of India. The authors thank Vimal Balasubramaniam for excellent research assistance and Debashish Mallick and Partha Sarathi Mukherjee for many helpful discussions on the subject. This paper was produced under the NIPFP-DEA Research Program. The authors are grateful to seminar participants at the Ministry of Finance for many insightful comments and suggestions.
1|Page
New thinking on corporate bond market in India
Table of Contents
Executive Summary............................................................................................................................. 3 1. 2. 3. Structure of the paper
References: Basu, Kaushik (1986) The Market for land: An analysis of Interim Transactions, Journal of Development Economics, Volume 20, no. 1 Bessembinder and Maxwell (2008) Transparency and the Corporate bond market , The Journal of Economic perspectives, 22, 217-234. Biais, B, Declerck, F, Dow, J, Portes, R, Ernst-Ludwig von Thadden (2006) European Corporate Bond Markets: transparency, liquidity, efficiency. Centre for Economic Policy Research. Innes, R, (1990) Limited Liability and Incentive contracting with Ex-ante action Choices, Journal of Economic Theory, 62, 45-67. Patil, R.H. (2005) Report of High Level Expert Committee on Corporate Bonds and Securitization Ross, Steven (1977): The determination of capital structure: Incentive- Signalling Approach. The Bell Journal of Economics, Vol. 8, no. 1. Tirole, Jean ( 2006) The theory of Corporate Finance. The Princeton University Press. 31 | P a g e