5 Development of Securities Markets: The Indian Experience
Table 5.3. Resource Mobilization by the Corporate Sector
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1.3 INDIAN EXPERINCE
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- Government Securities Market
Table 5.3. Resource Mobilization by the Corporate Sector
(In rupees crore) Share of Share of Debt Total Private in Total Public Debt Issues Resource Placements in Resource ________________________ Equity Public Private Total Mobilization Debt Issues Mobilization Year Issue issues placements (3+4) (2+5) (4/5*100) (5/6*100) 1 2 3 4 5 6 7 8 1995–96 14,493 5,970 13,361 19,331 33,824 69.12 57.15 1996–97 7,928 7,483 15,066 22,549 30,478 66.81 73.99 1997–98 1,701 2,957 30,099 33,056 34,756 91.05 95.11 1998–99 2,622 6,743 49,679 56,422 59,044 88.05 95.56 1999–00 3,230 4,475 61,259 65,734 68,964 93.19 95.32 2000–01 3,111 3,251 67,836 71,087 74,198 95.43 95.81 2001–02 1,025 6,087 64,876 70,963 71,988 91.42 98.58 2002–03 1,233 3,634 66,948 70,582 71,815 94.85 98.28 2003–04 3,427 4,424 63,901 68,325 71,752 93.53 95.22 2004–05 18,024 3,868 85,102 88,970 106,994 95.65 83.15 ©International Monetary Fund. Not for Redistribution Narendra Jadhav 127 regulatory requirements, accounting and auditing standards for issuers, and the infrastructure for trading, clearing, and settlement need to be further developed. Government Securities Market A well-developed government securities market facilitates market-based conduct of monetary policy and provides a domestic credit risk–free rupee yield curve as a benchmark for prices of other securities. However, prior to 1991, the government securities market was not developed, because of inefficient market practices and lack of proper institutional infrastruc- ture. Subscriptions to government securities emanated mainly from the reserve bank, as it monetized the budget deficits of the government and banks as part of fulfilling its statutory obligations. The main factor that inhibited the development of the sovereign yield curve in India in the pre- reform period was the prevalence of artificially low administrative cou- pon rates on these securities that were out of alignment with other interest rates in the economy. The coupon rates remained virtually unchanged up to 1979–80. Thereafter, although coupon rates were revised upward, especially for securities of longer tenor, the yield of a 30-year govern- ment bond remained lower than the maximum bank deposit rate. The reserve bank, despite being the debt manager for the government, did not have control over volume, maturity, and term structure of interest rates in the government securities market. This was mainly on account of the absence of any limit to the automatic monetization of central government budget deficits. Consequently, the market remained narrow, with captive Download 216.93 Kb. Do'stlaringiz bilan baham: |
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