When corporate managers – those of SMEs in particular – say that they cannot feel there has been any economic recovery, what they are expressing is exactly in line with the situation that I just described; namely, that the trend growth rate has been declining gradually.
In India, there is a need to improve the depth and liquidity of the corporate bond market to provide an additional source of funds for infrastructure companies. Limited investor base, limited number of issuers and preference for bank finance over bond finance are the main macro barriers for development of a deep and liquid corporate bond market.