The boom in consumer spending may have ensured that the retail debt market is in a growth tizzy. The article examines the importance of an active secondary debt market to increase the options available to the retail debt investors.

An ocean of publications has been expended on the way forward for India's financial markets in a post-reform era. You could, however, count on your fingers the working papers, reports, recommendations and documents that have been conceptualized, written and have struck at the issue that is fundamental to the sustainable development of India's financial system: Ensuring active retail participation in the secondary debt market.

As things currently stand, India's secondary debt market can almost be likened to Aladdin's lamp minus the genie. Nothing, however, can take away its potential and the role it deserves to play in the context of India's emerging macroeconomic situation. Active trading in debt instruments is an indispensable element of an efficient financial system and a critical determinant of capital market stability.

There is no better evidence of this phenomenon than what we see today. While economic reforms have paid to fiscal profligacy and have reined in mammoth deficits, they have also ensured that unless these reforms are all-encompassing, capital market distortions cannot be hidden, most notably in the current context, between debt and equity markets.

Portfolio Organizer Magazine, Retail Participation, Retail Debt Market, Retail Debt Investors, Financial Markets, Secondary Debt Markets, Financial Systems, Equity Markets, Mutual Fund Schemes, Secondary Markets, Capital Markets, Infrastructure Development Projects, Insurance Companies.