Tweaks and mandates: The wrong way to build a corporate debt market

It is clear that while the aim of Mr Jaitley's efforts is laudable, the focus and methods are misguided

Included in Finance Minister Arun Jaitley’s presentation of the Union Budget to Parliament last week was a package of statements and proposals aimed at increasing the depth of India’s corporate bond market. This is an important goal. Indian companies are over-dependent on borrowing from banks to finance investment, which has slowed down growth at times — such as now — when banks are reluctant to lend. Unfortunately, not all the measures the finance minister announced, in his effort to remedy this situation, can be welcomed. Mr Jaitley pointed out that corporate bonds rated BBB- or higher (according to the Standard