Indian Debt Market: An Analysis of the Post Liberalization Era

The debt market is one of the most critical components of the financial system of any economy and acts as a leverage tool in a financial system. The debt market comprises of two segments: government securities market and corporate debt market. Indian debt market is dominated by government securities as compared to corporate debt securities. Indian corporate bonds market is very underdeveloped and illiquid in comparison with the Government securities market and mostly depends on highly safe AAA rated bonds for both issuance and trading. This paper analyzes an overview of Indian debt market and to examine the role and growth of Indian debt market compared to equity market in India. It is concluded that Indian debt market has shown growth trend in primary market and secondary market as well as the government security has the prominent role in Indian debt market. This paper also examine the various types of risk affected in Indian debt market and to examine the role of debt market in the Indian economy.