Budget 2018: One-fourth of corporate fund raising should be through bonds

Yields shoot up as government misses fiscal target for 2017-18

In a major move that would finally make the corporate bond market deep and vibrant in the country, Union Finance Minister Arun Jaitley proposed that the corporate sector should now raise at least one-fourth of their funding requirement through bonds, while also reducing the regulatory minimum investment grade to ‘A’ from ‘AA’.

The FM also proposed in his Budget speech for 2018-19 that the RBI Act would be amended to accept uncollateralized deposits in liquidity operations, while setting the fiscal deficit target at 3.3 per cent for the next fiscal.

The fund raising requirement is not