'India needs more stock markets to channelise savings'

Leading bourse Bombay Stock Exchange on Tuesday favoured more stock markets in the country saying it will help in channelising the household savings into productive capital.

Speaking at an annual summit on capital markets, BSE MD and CEO Ashish Kumar Chauhan said there is "need for more stock markets in India as it allows to channelise the savings of the country into productive capital."

He further said that India needs to create 1.5 crore new jobs annually for next 20 years or about 30 crore new jobs that cannot be created by government alone. He said this "will have to come out from private sector which goes to the stock markets to raise its funds."

Chauhan said the focus should be on channelising the household savings into the equity market, rather than it turning into 'idle money'

"Only 10 per cent of India's total savings worth about $600 billion i.e. about 30 per cent of India's GDP ($2 trillion) goes into financial instruments while 90 per cent of it goes into non-productive assets like gold but when invested in stock markets that money goes into creating jobs and companies," Chauhan said at an Assocham event.

Meanwhile, Manoj Joshi, joint secretary, financial markets in the Finance Ministry talked about the need to train financial regulators in the country.

"There is a need to train financial regulators in India like Sebi and RBI in terms of cost-benefit analysis as it is essential to optimise regulation in the financial system by weighing its costs against its benefits," he said.

He emphasised on the need for a strong penal system for less regulation in financial markets.

"If Sebi or RBI are able to effectively take action against wrongdoers not after the scam is broken and after it becomes too large an issue but for the minor offences in the beginning, probably there would be less requirement of corporate governance norms," Joshi said.