PM for financial sector reforms to boost investments

Mumbai, Oct 6: Prime Minister Dr Manmohan Singh today indicated that India's financial sector may witness further reforms to ensure investments of a high order with the hope to achieve the growth rate of the country upto 10 per cent from the existing more than 8 per cent in future.

Addressing a select gathering after inaugurating the new building of the Security and Exchange Board of India (SEBI), 'SEBI Bhawan' here, the Prime Minister said,''if we have to achieve our growth ambitions of 10 per cent per annum, we need investments of a high order".

It is possible only by making our financial markets more efficient, more competitive and more global, he said and added,''We may currently be lacking a consensus on the needed reforms, however I am confident that we will soon be able to forge a consensus and take reforms forward''.

Complimenting the performance of the capital market of the country since its evolution, Dr Singh expressed dissatisfaction over the poor performance of debt markets by saying that 'In our experience, debt markets in India have not delivered as per our expectations'. Hence he emphasised the need to make efforts to understand why the debt market has not taken off and to take policy measures to make it deeper, broader and more liquid.

In this context, the PM said that the bulk of transactions in the capital markets of advanced nations are in debt securities. Ever since the Asian currency crisis took place during late 1990s, it is established that a lively market in corporate securities help the banking system to accurately price the current and future assets as it helps further mitigate the risk factor, he said.

Talking about the status of capital markets in the country, he said that it has come a long way since a decade and half when it was thrown open to institutional investors from abroad and the establishment of the National Stock Exchange (NSE) have turned out to be major landmarks in the evolution of our capital markets.

Coming on the role being played by the SEBI, he said that 'Today securities market regulator has evolved to include three principal objectives which include fair, efficient and transparent markets; investor protection and reduction of systemic risk'. Also, the PM had a word of praise for SEBI in shouldering the responsibility of a regulator in an efficient manner.

Significant among those that were present on the occasion include Union Finance Minister P Chidambaram, Minister of State in the Prime Minister Office Prithviraj Chauhan, Governor of Maharashtra S M Krishna and Chief Minister Vilasrao Deshmukh, RBI Governor Dr Y V Reddy, Deputy Chairman of Planning Commission Dr Montek Singh Ahluwalia and others.

UNI