India, which was considered the weakest link in the global economy, has now emerged as the only bright spot and this is a long journey from 2012-13 when even the rupee was falling sharply, Prime Minister Narendra Modi said, adding that he wanted to see the country mature into a developed nation in his life time.
Addressing the gathering at the inauguration of the National Institute of Securities Markets (NISM) campus at Patalganga, in Raigad, near Mumbai, Modi said his government was very keen to encourage start-ups. ''Stock markets are essential for the start-up ecosystem,'' said Modi.
He said he was happy at the progress made by the economy and improved ease of doing business, which has helped boost foreign investment to record levels.
''This is a time of slowdown in the global economy. Developed countries and emerging markets are both facing slow growth. Against this background, India is being seen as a bright spot. Growth is projected to remain among the highest in the world'' Modi pointed out.
He also said that those who profit from financial markets must make a fair contribution to nation-building through taxes. He said market regulator SEBI should work for closer linkage between spot markets like e-NAM and derivatives markets to benefit farmers.
For financial markets to function successfully, participants need to be well informed, Modi said, adding that India has earned a good name for its well regulated securities markets.
Financial markets can play an important role in the modern economy. They help in mobilising savings. They channel the savings towards productive investments, he said.
However, history has shown that financial markets can also cause damage, if not properly regulated. It is to ensure good regulation that the Securities and Exchange Board of India, - Sebi - was established by the government. SEBI also has a role to promote the development of healthy securities markets.
The primary aim of the stock market should be to help in raising capital for productive purposes. Derivatives have a use in managing risk. But many people feel derivatives are dominating the markets and the tail is wagging the dog. We should ponder as to how well the capital market is performing its main function of providing capital.
''You are all aware of the huge capital requirements for improving urban infrastructure. This government has launched an ambitious Smart Cities programme. In this context, I am disappointed that even now, we do not have a municipal bond market. There will be problems and difficulties in creating such a market. But the true test of an expert innovation is when it solves a complex problem. Can Sebi and the Department of Economic Affairs ensure that at least 10 cities in India issue municipal bonds within one year?''
''Our markets should show that they are able to successfully raise capital for projects benefiting the majority,'' the prime minister said, adding that the pain of demonetisation is only short term for a long term gain.
In less than three years, this government has transformed the economy.
''We have cut the fiscal deficit target every year and also achieved it every year. The current account deficit is low. Even after the redemption of loans taken under the special currency swap in 2013, foreign exchange reserves are high. Inflation is low, running at less than 4 per cent compared to double digit inflation under the previous government. Public investment has increased largely, even while the overall fiscal deficit has been cut. A new monetary policy framework has been introduced by law with an inflation target.
"The Constitutional Amendment on Goods and Services Tax had remained pending for years. It has been passed and the long awaited GST will soon be a reality. We have made progress on improving the ease of doing business. As a result of all these policies, Foreign Direct Investment has reached record levels, '' Modi said.
"By claiming that demonetisation has stopped a fast moving car, our critics too have acknowledged the speed of our progress," he asserted
The government on its part will continue with sound economic policies to ensure India's bright future in long run and no decision will be taken for short-term political gains, he said.
The prime minister, who is on a day-long visit to Maharashtra, also performed the 'bhoomipujan' for a grand statue and memorial of Chhatrapati Shivaji.
He will also lay foundation stone for the grand memorial of Maratha warrior king Chhatrapati Shivaji Maharaj and the metro rail projects in Mumbai and Pune.