PM stresses role of financial markets in Indian economy (Fourth Lead)
Raigad (Maharashtra), Dec 24 (IANS) Prime Minister Narendra Modi on Saturday stressed the crucial role played by financial markets for the growth of the Indian economy but warned of damages they can wreak if not properly regulated.
Inaugurating the new campus of National Institute of Securities Markets (NISM) run by the stock markets regulator Securities and Exchange Board of India (SEBI) at Panvel, Modi said India enjoyed a good name for its well-regulated securities markets and for them to function effectively, the participants needed to be well informed.
“The government is very keen to encourage start-ups… Stock markets are essential for the start-up system,” Modi said.”
“Financial markets can play an important role in the modern economy. They help in mobilising savings. They channel the savings towards productive investments,” he added.
However, history has shown that financial markets can also do damage, if not properly regulated, Modi said adding that India has earned a good name for its well-regulated securities markets.
“The spread of electronic means of trading and the use of depositories have made our markets more transparent,” he said.
Calling for wider inclusion, Modi said our markets must show that they were able to successfully raise capital for projects benefiting the vast majority of our population, particularly related to infrastructure.
Most of the infrastructure projects are financed by the government or through banks. The use of capital markets for financing infrastructure is rare.
“My call to you is to find ways to enable the capital markets to provide long-term capital for infrastructure. Today, only the government or external lenders like World Bank or JICA (Japan International Cooperation Agency) provide long-term money for infrastructure… Bond markets must become a source of long-term infrastructure finance,” Modi said.
Secondly, the markets must provide benefits to the largest section of our society — namely our farmers, he added.
“The true measure of success (of the stock markets) is in its impact in villages, not on Dalal Street or Lutyens Delhi. SEBI should work for closer link between spot markets like e-NAM (electronic National Agricultural Market) and derivatives markets to benefit the farmers,” Modi urged.
Modi also called upon increasing the contribution of market participants to the exchequer.
“We should consider methods for increasing it in a fair, efficient and transparent way,” he said.
Discussing the economic highlights, the Prime Minister said in less than three years, the government has transformed the economy.
“In 2012-2013, fiscal deficit had reached alarming levels, currency was falling sharply, inflation was high and current account deficit was rising.
“Now, we have slashed fiscal deficit, public investments have increased, forex reserves are high, inflation is low at less than four per cent compared to nearly double-digit in the previous regime,” Modi pointed out.
He said the government has progressed on ‘Ease of Doing Business’, the GST, pending since years, would soon be a reality and FDI has reached record levels, even “our critics acknowledge our speed of work”.
Modi made it clear that India has a bright future in the long run, and the government would not take decisions for short-term benefits, and would not shy away from difficult decisions if they were in the interest of the nation.
“My aim is to make India developed in one generation,” he concluded.
Earlier, Modi arrived in Mumbai by an IAF aircraft for a day-long visit to Maharashtra and has a series of engagements during the day.
On his arrival at the Chhatrapati Shivaji Maharaj International Airport around noon, he was received by Maharashtra Governor C. Vidyasagar Rao and Chief Minister Devendra Fadnavis.
Modi will perform the ‘bhoomipoojan’, ground breaking ritual, for the ambitious sea memorial dedicated to Chhatrapati Shivaji Maharaj coming up in the Arabian Sea, around 1.5 km from Mumbai shoreline at Marine Drive.
Thereafter, Modi will go to the Bandra Kurla Complex and perform the ground breaking ritual for the mega-infra project, Mumbai Trans Harbour Link, two new Mumbai Metro lines and elevated road corridors.
In the evening, Modi is scheduled to visit Pune and lay the foundation stone for the proposed Pune Metro Rail project.