Mumbai: The Government will build a political consensus on financial sector reforms which are necessary for better debt market, said Prime Minister Manmohan Singh on Friday.
"We need to reform financial sector further if we are to have a larger debt market. We need to promote the widely held pension fund system. We need a much larger insurance sector with a higher capital base and more diverse products," Singh said after inaugurating the new building of market regulator, Securities and Exchange Board of India (SEBI).
If India has to achieve the ambitious 8-10 per cent growth, "we need investment of a high order. These would be possible by making our financial markets more efficient, more competitive and more global," he said.
"We may currently be lacking a consensus on the needed reforms. However, I am confident that we will soon be able to forge a consensus on taking the reforms forward," he said apparently referring to stiff resistance to economic reforms from the UPA ally Left Front.
Asking market regulator SEBI to fully protect the interests of investors, Singh said he was happy that urgency was being given to comprehensively amend the SEBI Act to create appropriate investors' protection fund as well as further empowering the market regulator to address issues impacting investors' interest.
Noting that good market regulation could further ensure that engines of growth were allowed to run at full throttle, Singh said there was no space for manipulators in the system.
The securities market regulation has evolved in the country to include three principal objectives -- fair, efficient and transparent markets; investor protection and reduction of systemic risk, he said.
While appreciating SEBI's efficiency in shouldering the responsibility of a regulator, he however, felt that the market regulator was somewhat handicapped in its efforts to promote investor education due to lack of access to a suitable investors' protection fund.
Highlighting the need for stepping up the financial sector reforms, Singh said it was these which would generate the necessary long-term funds in a debt market and make available resources for the investment need of the country.
The financial sector has now come of age in the country even though there were a number of issues, which needed to be resolved even if they were controversial, Singh said.
There was a need to encourage discussion and debate that result in furthering "our collective understanding. This is the basis of ensuring a healthy progress... this debate is extremely important for all policy makers," he said.
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