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• A CRISIL report estimates that India's non-sovereign debt could rise from about 84% of GDP in fiscal 2026 to nearly 150% by 2047, in line with debt levels seen in developed economies during periods of rapid economic transformation.
• The report says achieving the Viksit Bharat vision of a USD 30 trillion-plus economy will require significantly deeper debt capital markets, as banks alone may not be able to meet the country's growing financing needs.
• It recommends expanding the corporate bond market by broadening the issuer base, increasing investor participation, strengthening secondary market liquidity and encouraging investments in mid-rated corporate bonds.
• CRISIL also advocates developing securitisation, covered bonds and municipal bond markets, alongside regulatory reforms to channel long-term capital into infrastructure, housing and urban development.
India will need sweeping reforms to its debt capital markets to finance its long-term economic ambitions, with non-sovereign debt projected to increase from around 84% of GDP in fiscal 2026 to nearly 150% by 2047, according to a new report by CRISIL. The report, titled Bonding for Viksit Bharat 2047, states that such an expansion will be essential for achieving the government's vision of transforming India into a USD 30 trillion-plus economy by 2047.
CRISIL's analysis compares India's growth trajectory with that of developed economies such as the United States, the United Kingdom, the euro area and Japan, where non-sovereign debt levels reached 140–150% of GDP during periods of rapid economic expansion in the early 2000s. The report suggests India is likely to require a similar financing structure to support investments by corporates, local governments and households.
While the banking sector has historically been the primary source of credit in India, CRISIL cautions that its capacity to continue driving credit growth may be constrained by slower deposit mobilisation and a credit-deposit ratio exceeding 82% as of March 2026. As a result, the report argues that debt capital markets including corporate bonds, municipal bonds, securitised instruments and money market securities will need to play a significantly larger role in financing economic growth.
According to the report, India's debt capital market remains relatively underdeveloped, accounting for only about 22% of GDP at the end of fiscal 2026, compared with gross bank credit at approximately 62% of GDP. It also notes that the corporate bond market is heavily concentrated, with AAA and AA-rated securities accounting for more than 80% of outstanding bonds. Government-owned entities and financial institutions have dominated issuances in recent years, while retail and foreign investors together hold less than 10% of the corporate bond market.
To address these gaps, CRISIL recommends broadening both the issuer and investor base. It calls for regulatory measures that encourage greater participation by insurance companies, pension funds and other long-term institutional investors, while also facilitating higher investment in A and BBB-rated corporate bonds, which it says have historically delivered favourable risk-adjusted returns.
The report further highlights the need to develop a robust securitisation market, including covered bonds, to improve capital recycling and increase credit availability. It also advocates strengthening the municipal bond market to provide cities with market-based financing for urban infrastructure, thereby reducing reliance on government funding.
CRISIL concludes that achieving the Viksit Bharat 2047 vision will require coordinated policy reforms across the entire credit ecosystem. A deeper and more diversified debt market, supported by regulatory changes and stronger market infrastructure, will be critical to ensuring that India's future financing needs are met efficiently and sustainably.
Source: CRISIL
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