More reforms in the works: PM

Prime Minister Manmohan Singh today committed to make the financial markets more efficient, competitive and global and said his government would take reforms forward in the key sectors of debt markets, pension and insurance.

Speaking after inaugurating Sebi Bhavan, the new headquarters of the Securities and Exchange Board of India (Sebi) here, the prime minister stressed the need to attract investments and create more efficient markets to ensure double-digit economic growth.

Sharing the dais with him were the four other original architects of financial sector reforms: Finance Minister P Chidambaram, Planning Commission Deputy Chairman Montek Singh Ahluwalia, Reserve Bank of India Governor YV Reddy and Chairman of the Prime Minister's Economic Advisory Council C Rangarajan.

Before the Who's Who of the country's financial and corporate world, Singh admitted there was lack of consensus on the "needed reforms" but expressed confidence that the government would be able to "forge a consensus and take reforms forward".

"If we have to achieve our growth ambitions of 8-10 per cent per annum, we need investments of a high order," Singh said, adding, "These will be possible only by making our financial markets more efficient, more competitive and more global."

Visibly unhappy with the state of affairs in the debt market, Singh said: "The bulk of capital markets in advanced nations are in debt securities. However, in our experience, the debt market in India has not quite delivered on expectations. We need to make efforts to understand why the debt market has not taken off, and take policy measures to make it deeper, broader and more liquid."

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 a much larger insurance sector with a higher capital base and more diverse products. It is these which will generate the necessary long-term funds for investing in a debt market and make available resources for the investment needs of our country," the prime minister said.

Singh, instrumental in making Sebi a statutory regulatory body as finance minister in 1992, said: "In retrospect, the decisions to open the Indian capital market to institutional investors from abroad and the establishment of the National Stock Exchange have turned out to be major landmarks in the evolution of our capital markets."

Complimenting Sebi, Singh said, "Our systems are among the best in the world, and the Indian capital market is recognised as among the best-regulated internationally."

The prime minister also announced that an investor protection-cum-education fund would soon be set up through an amendment to the Sebi Act of 1992, in accordance with the 2006-07 Budget proposal.