A Problem Of Infrastructure

Several issues have been discussed threadbare and placed in their proper perspective by the SA Dave committee report on Infrastructure for the Indian capital markets. The meeting discussed how to bring about these key changes. The infrastructure can improve only if the government changes its perception towards it. Dave said that there were certain archaic laws and mindsets that required a change for creating adequate infrastructure in the countrys capital market. According to a key committee member, the problems are in fact closely linked to 'psychological barriers rather than actual problems. There is an overall perception that the Indian markets will require greater capital raising techniques, and also that the banking community cannot lend to the stock brokers. These misconceptions have to go, marketmen say. It is true that some of the key Indian financial sector laws, particularly linked to corporate and income-tax sectors need to be suitably amended. The rapidly growing Asian markets of Malaysia and Sri Lanka which were formerly British colonies held the same Company Laws which India has, being a legacy of the British rule. However, they changed these laws in a bid to attract capital and investment into the country. India needs to change too if it has to meet its capital requirements for development, a senior committee member says. The problems are thus clearly more psychological in nature rather than in reality. Until the capital market thinkers do not loosen these psychological problems, these issues will continue to be discussed, reviewed and argued upon without any concrete changes being made.