The Hindu Business Line : PM for more reforms to boost debt market

THE PRIME MINISTER, Dr Manmohan Singh; the Finance Minister, Mr P. Chidambaram; and the SEBI Chairman, Mr M. Damodaran, at the inauguration of SEBI's new head office building `SEBI BHAVAN' in Mumbai on Friday.

Mumbai , Oct. 6

The Prime Minister, Dr Manmohan Singh, on Friday said he was confident of forging a consensus on financial sector reforms to get an annual growth of 8-10 per cent.

He said a higher level of investment could be facilitated by making the financial markets more efficient and globally competitive.

"We may currently be lacking a consensus on the needed reforms. However, I am confident that we will soon able to forge a consensus and take the reforms forward," the Prime Minister said.

Quality debt market

Addressing a function after inaugurating the SEBI Bhavan, costing Rs 75 crore at the Bandra Kurla Complex, he stressed on the need for a quality debt market. "While regulation may help in this direction to some extent, we need to reform our financial sector further if we are to have a larger debt market."

"We need to promote a widely held pension fund system. We need a much larger insurance sector with a higher capital base and more diverse products." It will generate the necessary long-term funds for investing in a debt market and make available investible resources.

On the dais were the Famous Five — Dr Manmohan Singh, Mr P. Chidambaram, Dr C. Rangarajan, Mr Montek Singh Ahluwalia and Dr Y.V. Reddy — who put the Indian economy on the path of reforms in the 90s.

Hailing SEBI's role as capital market regulator, the Prime Minister said it was good regulation that would ensure the safety of markets and help investors to take informed decisions. The SEBI Act is being amended to create an investor education fund.

`Get back small investors'

The Finance Minister, Mr Chidambaram, asked SEBI to take measures to get back small investors into the bourses. "It is the market which will turn savers into investors. A safe and well-regulated market will ensure that. And unless every saver is turned into investor one cannot expect to reach high levels of growth that is imperative for this country," he said.

He also expressed the need to groom a cadre of financial market intermediaries. On disclosures, Mr Chidambaram said it was important for intermediaries to have high disclosure standards and asked the capital market watchdog to address this issue.

Calling for intermediaries to be regulated, he said it was necessary to have self-regulatory organisations though they have not fully developed in the country.