The Indian capital market has evolved significantly over the past two decades and has further potential to grow through enhanced governance according to a joint study released by PricewaterhouseCoopers (PwC) and ASSOCHAM. The study, titled ‘Indian capital market: Growth with governance’ analyses India’s economy and financial markets which have undergone radical changes since the onset of liberalisation in the early 1990s.
The study maps the journey of the Indian capital market from the pre-reform era (before 1991) to the liberalised market of this decade. It further points out that the Indian market has evolved to an unprecedented level of sophistication and complexity. The capital market has seen enormous upheaval in the last decade, with the BSE Sensex reaching the 20,000 mark and then declining sharply due to market pessimism based on global cues.
The study points out that enhanced governance is imperative for the functioning of the capital markets. The establishment of the Securities and Exchange Board of India (SEBI) as the supreme capital markets regulator, with a clear mandate of protecting investors and restoring confidence, was a considerable step taken by the government in power.
Further, the establishment of the National Stock Exchange (NSE), supported by a strong legal framework and technological base to strengthen the governance structure, has been the highlight of the Indian capital market in the last decade. The opening up of the economy has increased the flow of Foreign Direct Investment (FDI) and has put India on the global map, as a new-age economic force to reckon with.
Bharti Gupta Ramola, Transaction Leader, PricewaterhouseCoopers remarked, “While a lot has been achieved in the last few years, we can do more to encourage further innovation and to enable the capital markets perform their function, of financial intermediation within the governance framework, to meet the needs of this fast growing economy.”
The study is based on secondary research and internal insights and explores the course of the Indian capital market, primarily under various contexts which include the impact of the global of financial meltdown on the Indian economy, prudent usage of financial products to ensure that they do not snowball into an economic catastrophe, and evolving derivative trading in India. The study also explores the Indian debt capital market which has many advantages like diversification opportunities, efficiency in managing cost of capital and financial stability.
B S Rawat, Secretary General, ASSOCHAM added, “India is fundamentally a strong economy and it has reached an unprecedented level of importance over the last decade in the global forum. The responsibility to restore confidence in the market is far greater now. The study maps the course of the Indian capital market from the pre-reform era to the present day. While the governance structure has improved significantly there is still an imperative need to further the governance levels as also improve compliance standards to not only restore the confidence of ever increasing number of investors but also to adopt more efficient and robust regulatory standards including the disclosure norms and financial literacy empowerment. ASSOCHAM has always been in the forefront to take this mission of enlightenment of the investor with deterrence for the unscrupulous market manipulators . We look forward to improved regulations and transparent policy mechanism to make the capital market more vibrant and investor friendly, as the National GDP has a direct bearing on the growth and depth of capital market.”
About PricewaterhouseCoopers
PricewaterhouseCoopers Pvt. Ltd. (www.pwc.com/India) provides industry - focused tax and advisory services to build public trust and enhance value for its clients and their stakeholders. PwC professionals work collaboratively using connected thinking to develop fresh perspectives and practical advice.
Complementing our depth of industry expertise and breadth of skills is our sound knowledge of the local business environment in India. PricewaterhouseCoopers is committed to working with our clients to deliver the solutions that help them take on the challenges of the ever-changing business environment.
PwC has offices in Ahmedabad, Bangalore, Bhubaneshwar, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai and Pune.
The name PricewaterhouseCoopers is one word, with uppercase P, uppercase C, and all other letters in lower case.
About ASSOCHAM -
ASSOCHAM is one of the oldest Chambers of Commerce which started in 1917. ASSOCHAM is known as the “knowledge chamber” for its ability to gather and disseminate knowledge. Its vision is to empower industry with knowledge so that they become strong and powerful global competitors with world class management, technology and quality standards.
ASSOCHAM is also a “pillar of democracy” as it reflects diverse views and sometimes opposing ideas in industry group. This important facet puts us ahead of countries like China and will strengthen our foundations of a democratic debate and better solution for the future. ASSOCHAM is also the “voice of industry” – it reflects the “pain” of industry as well as its “success” to the government. The chamber is a “change agent” that helps to create the environment for positive and constructive policy changes and solutions by the government for the progress of India.
The road is long. It has many hills and valleys – yet the vision before us of a new resurgent India is strong and powerful. The light of knowledge and banishment of ignorance and poverty beckons us calling each member of the chamber to serve the nation and make a difference.
ASSOCHAM derives its strength from the following Promoter Chambers: Bombay Chamber of Commerce and Industry, Mumbai; Cochin Chamber of Commerce and Industry, Cochin; Indian Merchant’s Chamber, Mumbai; The Madras Chamber of Commerce and Industry, Chennai; PHD Chamber of Commerce and Industry, New Delhi and has over 3 lakh members.
Together, we can make a significant difference to the burden that our nation carries and bring in a bright, new tomorrow for our nation.
