New Delhi: In these tough economic times, India has the opportunity to pilot strategies that will not only attract more foreign capital into the country but also put them to use in an inclusive manner, the domestic stock market, which has just over 7,000 listed companies, should have more depth in terms of participation as well as instruments available for potential investors which will help in balancing the dependence on unstable foreign inflows with increased local investors’ participation, says an ASSOCHAM study.
Mr. D S Rawat, Secretary General ASSOCHAM said, tapping social media to demystify stock markets for the common man, establishing transparent market system and reaching out to more rural population will all be steps in the right directions.
Indian economy is going through challenging times and with slowing growth, the focus is all the more high on capital flows into the stock market. Though capital flows, also known as hot money, might not be the real reflection of economic fundamentals but the surrounding sentiment cannot be ignored. With volatility in capital flows being a reality to live with, the downturn provides an opportunity to to the government to re-assess its strategies, adds the ASSOCHAM study.
The study that looked into capital flows and ways to tap their immense potential suggests that the need of the hour for India is to weave reforms with financial inclusion. Such a blend will benefit millions of our population and make them participants in India’s growth story.
Encouraging more companies to become publicly trading entities besides attracting more people into the stock market, will help in boosting the long term prospects of the capital market, commented the ASSOCHAM paper.
With rising unpredictability for the markets being all pervasive, India has to sooner than later devise long term sustainable strategies and do away with short term knee jerk reactions.
“To increase and sustain capital flows, the study suggests an eight point agenda. They include tapping the country’s demographic dividend by reaching out to the young people, exploiting social media such as Facebook and Twitter to create awareness among the masses and de-mystify the myth of investing in stock markets, setting up a system to provide the public access to accurate and reliable data”, added Mr. Rawat.