To provide more depth to the corporate bond market, the government will nudge companies

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to go in for public offerings instead of private placements. Companies may also be told to list privately placed bonds, now mostly held by financial institutions.

“Indian companies are going in for more private placements. But why not more public issues,” wondered a top finance ministry official who said that this and other measures to give a leg up to the corporate bond market would be taken up by the finance ministry with top market players on Thursday.

The government also plans tax incentives, reduction in stamp duty, and simplification of regulatory norms to promote the corporate bond market.

So far this year Rs 79,000 crore has been raised by Indian companies from private placement of bonds. Public offerings of bonds is less than a tenth of the debt raised. Most companies prefer private placement because of the high transaction cost of public bond issues.

Top executives of AK Capital, Morgan Stanley, ICICI securities, PNB Gilts and the Tata group, among others, will attend the meeting in the ministry. The joint secretary in charge of capital markets, Thomas Mathew, will chair it. Official quoted earlier ruled out any further relaxation in the overseas borrowing norms in the next three months, saying RBI had eased the guidelines for external commercial borrowings (ECB) only recently.

On Monday RBI relaxed ECB norms for infrastructure companies with direct foreign equity of up to 25 percent. They can now raise fund overseas without the government’s permission. The ECB limit for individual companies was raised from $500 million to $750 million. For companies in the services industry like hospitality and hospitals the limit was doubled to $200 million. Indian companies can also together borrow up to $1 billion in yuan. Infrastructure companies were given further flexibility. Earlier, the overall ECB borrowing limit had been raised $30 billion.

On the proposal to lower the securities transaction tax (STT), the official said it was not going to be easy. Though the government is looking at reducing the levy on equities and currency derivatives, it may not happen overnight. There are revenue implications as well. The government earns up to Rs 8,000 crore in annual revenue from this tax. There is also a proposal to reduce stamp duty on trades in futures and options and currency derivatives. It is unlikely that the planned cut in STT will come before the next budget, another finance ministry said.

He said the finance ministry decided to monitor the progress of 10 to 15 large infrastructure projects in the public sector. “The projects are yet to be identified, but it is important that infrastructure develops at a faster pace and we will be closely monitoring them.” As follow- up to the meeting India Inc had with Pranab Mukherjee on August 1, economic affairs secretary R Gopalan will meet secretaries of 11 important ministries, including civil aviation, coal and mines, commerce and industry, communications and IT, agriculture and, environment and forest. They will review the work done by different ministries on corporate India’s suggestions. “It is a precursor to a meeting that the finance minister will call in the second week of October where he will take stock of the progress,” the official said.