Finance Minister P. Chidambaram today said that the Financial Sector Legislative Reforms Commission’s (FSLRC) recommendations were the most important ones in the last decade, while conceding that passing legislation will take time and was complex.

But he said, that “we could go ahead with non-legislative recommendations while we start the process of legislating reforms.“ He said a consultative taskforce is already working on it.

Chidambaram was speaking at the 20th anniversary celebrations of the National Stock Exchange in Mumbai.

Retail participation

Expressing his main concerns, Chidambaram called for increased retail participation in the capital market.

He pointed out that as of end November, there were just 21.6 million retail accounts that accounted for less than 2 per cent of the population.

The degree of risk avoidance was high among Indian households and the challenge was diverting their investments from gold and real estate investments to the capital market.

'Need to develop bond markets'

He also flagged the need to develop bond markets while asking why it was not possible to buy government securities easily at the neighbourhood brokerage.

He said there was urgent need to improve the competitiveness of the Indian financial market with periodic reviews. He highlighted the need for increasing financial inclusion and financial literacy.

Chidambaram also expressed concerns that the Non-Deliverable Forward (NDF) market was many times the onshore market. There was an urgent need to resolve this, he said.

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