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The Economic Survey 2008-09 which was presented by the Union Finance Minister, Pranab Mukherjee, has called for the liberalization of the reforms related to banking and financial markets. The reforms related to enhancing foreign investments in the banks in a step by step fashion as well as lifting up of the bans on certain commodities have also been put forward by the survey.
The survey also has demanded for an accelerated passage of the Banking Regulations (Amendment) Bill. It also has added that individuals who have a very high net worth has to be given permission for direct investment in capital markets. According to the survey report, this bill will help in the better management of liquidity requirements and will help in the liberalization of the regulations related to investment banking.
The ban on the commodity futures contracts has been sought to be removed to restore price discovery and price-risk management. Futures trading in rice, urad and toovar has been suspended indefinitely, and that of sugar till Dec 31.
The survey has also recommended that the government must liberalise spot and futures currency markets of India. The survey suggested that the financial market regulations must be under the power of Securities and Exchanges Board of India (SEBI).
Additionally, it has favoured liberalising of the investment norms of insurance and pension funds and tax incentives for the development of the long-term debt markets.
In a move which will have important impact on the Indian corporate debt market, the Economic Survey has advised the government to allow the repurchase of the corporate bonds, thus providing an exit route for the investors.
In a move which will have important impact on the Indian corporate debt market, the Economic Survey has advised the government to allow the repurchase of the corporate bonds, thus providing an exit route for the investors.
