By IANS,
New Delhi : To give India a competitive edge and improve its economic infrastructure, Mumbai should be turned into a global financial hub with reforms and pragmatic legislations, says an expert panel headed by a noted economist.
“India is at a turning point in its financial sector,” says the committee headed by former chief economist of the International Monetary Fund (IMF) Raghuram G. Rajan, which discussed its draft report on reforms with the Planning Commission top brass Tuesday.
“Indeed, the road to making Mumbai an international financial centre runs through every village and slum in India,” says the committee, which includes ICICI Bank chief K.V. Kamath and State Bank of India chairman O.P. Bhatt.
The committee members feel that the Indian government should do the needful to enable Mumbai, the epicentre of the fast-growing Indian economy, to be fully equipped to meet the global challenges.
“In the process of gaining the productivity, innovativeness to serve the masses, the financial sector will get the unique edge and scale to be competitive internationally,” the committee’s draft report says, giving its rationale for Mumbai’s elevation.
The Planning Commission had set-up the expert committee on financial reforms in August 2007. Its draft report was discussed here Tuesday and the final report is expected to be presented to Prime Minister Manmohan Singh by September.
The report says Mumbai is home to two of the country’s largest stock markets -the Bombay Stock Exchange and the National Stock Exchange – as also the central bank and the markets regulator the Securities and Exchange Board of India.
Experts say Mumbai’s location is eminently suitable for daylong trading across time zones, with a time difference of three-and-a-half hours with Tokyo, four-and-a-half hours with London and nine-and-a half hours with to New York.
As a hub of financial flows, Mumbai scores on high equity trading volumes and good presence of global banking and financial services firms, but requires upgradation of existing infrastructure, the expert panel says.
“But as we argue in this report, there is no easy path for the government,” it says.
“The old system of attempting to mandate outcomes from the centre does not work any more even if it might have when our private sector institutions were less well developed and the Indian economy was more closed.”