New Delhi: NITI Aayog has proposed a series of measures to boost retail participation in India’s corporate bond market, where individual investors currently account for less than 2 per cent of activity.
In the latest report by NITI Aayog on deepening the bond ecosystem, the government think tank has recommended introducing special bond accounts, easing digital access, and offering tax incentives to make corporate debt more attractive to small investors.
The proposals include enabling dematerialised trading in listed bonds, facilitating purchases via mobile and internet banking, and enabling UPI-based transactions to lower entry barriers.
The report also highlights the need for real-time pricing tools, standardised disclosures, yield calculators, and awareness campaigns to enhance transparency and improve investor confidence. It further suggests developing a safeguarded short-selling framework to aid price discovery.
One of the key recommendations is the creation of a Corporate Bond Savings Account (CBSA), envisioned as a tax-saving product under Section 80C, similar to ELSS.
Banks and financial institutions would offer these accounts, while regulators define eligible instruments and compliance norms.
The report also calls for diversifying debt instruments through covered bonds, direct subsidy bonds, and fractional bond investment funds.
Additionally, it proposes a revamped “Masala 2.0” framework and expanding the issuer base to include MSMEs, municipalities and sub-investment-grade entities.
