The World Bank has commissioned financial consultancy major Ernst & Young (E&Y) India to draw up a roadmap on the corporate debt market that the Indian government is mulling to part-fund the $1-trillion infra investment required by the country over the next five years.

The study is being sponsored by the Finance Ministry and capital markets watchdog Sebi and is funded by the World Bank, a person familiar with the development told PTI here.

The source also said E&Y signed the contract for the project in late April and would have to submit the report within six months. However, an E&Y spokesperson refused to confirm, citing client confidentiality.

According to a Boston Consultancy Group forecast, the domestic debt market could grow four-fold from about $400 billion, or 45% of the GDP in 2006, to about $1.8 trillion, or 55% of the GDP, by 2016. Within this, the non-government segment could grow nearly six-fold, from $100 billion in 2006 to $575 billion in 2016.

In the absence of a developed retail market, companies do not have any incentive to hit the debt market to raise capital, though this mode of fund raising is cheaper than bank funding.

According to the industry, fragmented regulatory jurisdictions and a common perception that various authorities are working at cross-purposes hinder the growth of a corporate bond market.

However, Reserve Bank Deputy Governor Subir Gokarn had recently allayed any such fears, saying developing a vibrant corporate debt market is a complicated process and all the regulators and finance ministry are earnestly involved in the process and are working in tandem.

"I would like to state that there is no confusion regarding the role of each regulator in this process as we are all working in tandem," Gokarn told a Ficci meet on the topic.

At the same venue, Tata Sons Finance Director Ishaat Hussain, who is a member in the Sebi panel on the corporate debt market, had said, "At our discussions on this with Sebi, the overriding impression that we get from Sebi is that it is not sure about the role it has in the entire exercise."

The government, which is targeting a $1 trillion, or Rs 45 lakh crore, infra investment over the next five years as part of its double-digit growth trajectory push, has been working with the regulators, primarily Sebi and the RBI, to iron out any inter-regulatory issues on this front for quite some time now.

In this regard, commissioning of E&Y India to prepare a roadmap for the corporate debt market is one of the last steps for policy action on the ground.