“Going forward, India must continue down this path to modernise soft infrastructure: reforms in the bond market, expanding investor base, greater participation of the private sector and strengthening the regulation of public banks,” said Luis E Breuer, senior resident representative for India, International Monetary Fund (IMF).
The experts indicated that while the country was able to build trust in equity markets.
“We have become a trustful country in the last 30 years, showing confidence of investors in various institutions and more importantly in our entrepreneurs. This would have not been possible without corporate governance and transparency,” said Ashishkumar Chauhan, Managing Director and Chief Executive Officer, National Stock Exchange.
But it needs to replicate the success in capital markets as well.
“Risk aversion doesn’t allow for corporates to raise money from the bond market. Stock markets, we are at par, but we need to take a holistic approach to the development of bond markets,” said Rajnish Kumar, chairman of Mastercard India and former chairman of State Bank of India.
Experts indicated that further reforms in corporate governance, especially protection of rights of minority shareholders and financial education.“Corporate governance is a low-hanging fruit; even marginal improvement in improving the quality of boards can have an impact,” added Andrea Goldstein, Head of India/Indonesia, Economics Department, OECD (France).
Prithviraj Srinivas, Chief Group Economist, Mahindra Group, emphasized that trust will help financial savings grow.
“By working on bringing down cost of doing business, you can help attract capital in markets. Institutionally building trust on inflation target and reducing cost of doing business will help markets over next 25 years,” he pointed.
They also batted for reforms in the stock market to help with growth.
“We have to deepen liquidity, it will be useful to have a stock loan market. The market does not have a mechanism for long-dated put, which allows hedging,” said Ridham Desai, Managing Director, Morgan Stanley.
“Among the most important agents of economic development, a buoyant equity market is the only source of wealth creation for common man that has direct impact on consumption leading to better growth thereby completing the virtuous cycle,” Desai added, noting that participation of Indian households had increased.
