Overview

Corporate debt refers to the borrowing that companies undertake to finance their operations or to make investments.This can include bonds bank loan and othe forms of debt.In recent year both India and the rest of the world have seen an increase in corporate debt levels. However there are some notable differences in the trends between India and the global market.In India, corporate debt has been a major concern for policymakers and investors. According to data from the Reserve Bank of India, the total debt of Indian companies increased from Rs 29.5 lakh crore in March 2015 to Rs 60.3 lakh crore in March 2021. This increase has been driven by factors such as infrastructure investments, mergers and acquisitions, and expansion of the manufacturing sector.One of the major concerns with corporate debt in India is the high level of non-performing assets (NPAs) in the banking system. NPAs refer to loans that are not being repaid by borrowers. As of December 2020, the gross NPA ratio for Indian banks was 7.5%, which is higher than the global average of 4.4%.In contrast, global trends show a more mixed picture. According to data from the Institute of International Finance, global corporate debt increased from $54 trillion in 2018 to $66 trillion in 2020, driven by low interest rates and the need for companies to raise funds during the COVID-19 pandemic. However, the increase has been concentrated in developed markets, particularly the United States and Europe, while emerging markets have seen a decrease in corporate debt levels.Overall, while both India and the rest of the world have seen an increase in corporate debt, India's high level of NPAs in the banking system is a major concern that sets it apart from global trends.

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