The annual economic survey in India recommends reducing the cost of capital by diversifying financing beyond banks and lowering taxes on debt instruments.

GK and monthly revision
India should cut tax on debt instruments to reduce cost of capital, economic adviser says
The annual economic survey in India recommends reducing the cost of capital by diversifying financing beyond banks and lowering taxes on debt instruments. It suggests reforms to strengthen long-term capital markets, including credit enhancement facilities and revised investment guidelines for long-term funds. The survey also advocates for a shift to activity-based regulation to prevent regulatory arbitrage, which could help improve access to capital and reduce the overall cost of doing business in the country.
Revision structure
Key points
Exam-ready takeaways
The survey suggests reforms to strengthen long-term capital markets, including credit enhancement facilities and revised investment guidelines for long-term funds.
The survey advocates for a shift to activity-based regulation to prevent regulatory arbitrage.
These measures could help improve access to capital and reduce the overall cost of doing business in the country.
The recommendations are aimed at supporting economic growth and development in India.
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