More Stories

Informist, Thursday, Jan. 29, 2026

 

NEW DELHI – In the post-pandemic era, a "decisive inflexion" was seen in household savings flowing into equity markets, but participation in debt, specifically market-based debt instruments, has not kept pace with the significant reorientation of household savings towards equities, the Economic Survey for 2025-26 (Apr-Mar) said Thursday. "Beyond equities, the development of debt-linked instrument markets is a logical next step towards achieving balanced, diversified portfolios and meeting long-term financial goals," it said.

 

"A well-diversified portfolio should include adequate exposure across a broad range of asset classes," the Survey, authored by a team led by Chief Economic Adviser V. Anantha Nageswaran, said. 

 

Making a case for deepening the corporate debt market, the survey said that such a market channels institutional and household savings into productive sectors, strengthens efficient price discovery through a robust yield curve and supports the development of critical risk management instruments such as credit derivatives and securitisation. However, retail engagement with corporate bonds and debt-oriented investment products remains limited, resulting in debt securities comprising a small portion of household financial assets, it said. 

 

This limited participation by households in market-based debt instruments is mirrored in the overall shallow depth of India's corporate bond market, the survey said. "India's corporate bond market remains underdeveloped, accounting for around 16-17% of GDP, compared with the equity market capitalisation of over 130% of GDP."

 

"The household ownership share of deposits has decreased, while that of pension and insurance assets has remained almost unchanged over the period from FY19 to FY24," according to the survey. "Over the past five years, cumulative inflows by domestic investors into the equity markets have been substantially higher than from foreign investors," it added. "This shift highlights the increasing ability of domestic savings to support equity markets, stabilise the market, and mitigate the volatility associated with external capital flows."

 

The survey also noted that a deep corporate bond market reduces systemic concentration risk and dependence on bank-dominated financing, thereby strengthening overall financial stability.  End

 

Reported by Priyasmita Dutta

Edited by Saji George Titus

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.