Indian debt market way behind developed economies: Study

India's debt market significantly trails those of the developed economies, industry chamber Assocham said on Tuesday citing a joint study conducted along with rating firm Crisil.

"With a meagre 35 per cent and 17 per cent debt market penetration in government securities (G-secs) and corporate bonds, India is trailing developed economies like the US, where it is 83 per cent and 123 per cent respectively," the release said quoting the study.

"Indian debt market also suffers from a skew towards sovereign paper, with G-secs (including treasury bills and state-development loans) accounting for three-fourths of the pie, while bank loans form predominant medium of corporate funding," it said.

The study said there is "a marked lack of participation, of both individual and institutional investors."

"While individual investors limit themselves to the most accessible bank fixed deposits, institutional investors, such as insurance and pension funds are restricted by regulatory constraints, especially in terms of preference to G-secs over bonds," it added.

The report said while response of foreign portfolio investors has remained mixed, individual investors are warming up to debt investments evidently as their investments in debt mutual funds increased from Rs 74,386 crore as of March 2009 to Rs 3.63 lakh crore as of September 2017.

--IANS

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