India Proposes Measures to Broaden Capital Markets

The Government of India has proposed a series of measures to strengthen capital markets and improve access to foreign investment. Presenting the 2004-05 General Budget, Finance Minister P Chidambaram outlined plans to simplify the registration process for foreign institutional investors (FIIs), increase the investment ceiling for FIIs in debt funds, and introduce an alternative trading platform for small and medium enterprises. The measures aim to boost the country's economic growth and increase foreign investment.

Key Takeaways:

The Government proposes to simplify the registration and operations procedure for Foreign Institutional Investors (FIIs) to make it quicker and more efficient.
The investment ceiling for FIIs in debt funds is to be raised from US$1 billion to US$1.75 billion.
Banks with strong risk management systems will be allowed greater latitude in their exposure to the capital market.
An alternative trading platform is to be created for small and medium enterprises to raise equity and debt from the capital market.
Steps will be taken to integrate the commodities and securities markets.
An inter-ministerial committee will examine and implement the recommendations for liberalisation of FII limits in certain specified sectors.
The Securities and Exchange Board of India (SEBI) will shortly announce the decision on brokers' fees, resolving the longstanding issue.
The Reserve Bank of India (RBI) and SEBI will announce necessary measures regarding the proposed capital market reforms.

Statistics:

US$1 billion: current investment ceiling for FIIs in debt funds.
US$1.75 billion: proposed increased investment ceiling for FIIs in debt funds.
2004-05: period for which the General Budget was presented.
PTI: news agency cited as the source of the information.

Sources: