Package To Tackle Perceived Weaknesses, Says Montek

Union finance secretary Montek Singh Ahluwalia said his ministry was working on a package that would address the "perceived" weaknesses in the economy. Vitality of the economic factors is essential to revive the capital markets, Ahluwalia said at a seminar organised by All India Association of Industries (AIAI) on 'Restoring investors' confidence in the capital markets' here.

The ministry was also examining ways to boost government investment in infrastructure as well as to create a conducive environment for promoting private investments in the sector.

Commenting on serious concerns expressed by the market players on the depressed state of capital markets, the finance secretary said that one should not become despondent at the condition of the capital markets as it is a cyclical process as in the case of any other business.

He said that the economy has witnessed a slow down and the stock market is reflecting this fact. "A process of consolidation is on at the moment which is normal," said Alhuwalia.

On the issue of provident fund money being routed into stock market, Ahluwalia said that there is resistance from provident fund managers on this issue. However, he was of the view that at a later stage this resistance needs to be overcome. He said that the foreigners are broadly happy with the direction of reform and regulation which has been carried on at the Indian stock markets.

"However, we need to take a self critical look on whether these regulations are working," Ahluwalia commented.

Addressing the gathering, Vikram Gandhi, president, Morgan Stanley India, said that sentiment plays a major role in improving the depressed markets. He was of the view that only greater institutional activity that can revive the capital market.