Chief economic advisor: We need to think about capital markets reform 2.0 to meet the needs of a growing economy: CEA

New Delhi: Chief economic advisor V Anantha Nageswaran on Friday said further capital market reforms are needed to meet growing economic demands. “Capital market reform has been one of the most successful technology reform interventions of the last 30 years. But we are at a point where we need to rethink this. So we need to think about Capital Market Reform 2.0,” he said. Speaking here at the CII Annual Business Summit.

Capital market reforms were initiated by then Finance Minister Manmohan Singh following the liberalization of India’s economy in 1991.

As part of the reforms, the Securities and Exchange Board of India (Sebi), a capital market regulator, was established in 1992 to ensure efficient regulation and development of the market.

He also said the country needed to have rough estimates of investments for a holistic and comprehensive picture, adding that this would be met through a combination of debt and equity.

“We know that in a few months India will be included in the JP Morgan government bond index. We have to process it and after that it will also be included in the Bloomberg bond index from January 2025. They will be patient and attract money, and the character “It will also bring about an impatient fund flow,” he said. India’s fully accessible route bonds will be added to JP Morgan’s Sovereign Bond Index Emerging Markets over a 10-month period starting June 28. Government bonds will also be included in Bloomberg’s Local Currency Emerging Markets Index for 10 months starting January 31. Nageswaran said India must be very careful about its dependence on foreign flows.

“Over the next three to five years, we still need to be cautious about our dependence on global funding. But I think there will be opportunities to secure greater external capital in the second part of the journey towards 2047.” said.