From a risk management perspective, however, an overemphasis on bank lending to companies increases concentration in the system that can be reversed by accelerated growth of a corporate bond market. Government borrowings have a pre-emptive claim on bank lending by statute and a mature marketplace for corporate debt does bring down intermediation costs. India, however, trails other emerging economies in terms of the size of its corporate bond market relative to GDP, due in part to interest-rate differentials that make external commercial borrowings compelling for top-rated Indian companies. Reasons for the pace of growth need to be sought beyond tax-assisted retail investment flows into debt schemes of MFs.