Budget 2025: Infrastructure focus and fiscal prudence likely to shape bond market
Union Budget 2025 has unveiled measures aimed at bolstering infrastructure financing and maintaining fiscal prudence, which is expected to have a significant impact on the Indian bond market.
A key highlight is the government's continued emphasis on enhancing credit access for the infrastructure sector through the National Bank for Financing Infrastructure and Development (NaBFID).
Analysts believe NaBFID will play a crucial role in reviving long-term infrastructure financing, including the development of the bond and derivatives markets, and act as a market maker to improve liquidity.
“The announcements made in the Union Budget 2025 indicate continued Government focus on providing enhanced credit access for the infrastructure sector, through Nthe ational Bank for Financing Infrastructure and Development (NaBFID). This is expected to play a crucial role in reviving and providing impetus to long-term infrastructure financing, including the development of bonds and derivatives markets to further augment infrastructure growth,” says Kumar Saurabh Singh, Partner at Khaitan & Co.
Additionally, Singh noted that NaBFID is proposed to act as a market maker to ensure liquidity in the bond market and provide innovative credit enhancement solutions.
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