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Journalism of Courage
Five ardent reformers, who between them can lay claim to some of the most dramatic and significant course corrections in India8217;s economic policy, were found on one stage in Mumbai on Friday. The occasion 8212; the inauguration of SEBI8217;s new headquarters 8212; added a little bit more significance. Of all the markets, the stock market is perhaps the freest in India. It saw some of the earliest reforms. SEBI itself was a reformist answer to the control-maniac Controller of Capital Issues. The Sensex has taught Indians both the joys and the lessons of market participation. So when Manmohan Singh, P. Chidambaram, Montek Singh Ahluwalia, C. Rangarajan and Y.V. Reddy were guests for a SEBI celebration it was impossible not to interpret the occasion as one symbolising the distance India has travelled in recent years.
But of course we aren8217;t even halfway there. A small but significant reminder came from the PM when he pointed out that a country with huge capital investment needs cannot have a shallow debt market. The debt market is a small affair where local banks dominate and foreign participants have to suffer pre-reform era like limits on their holdings. Given India8217;s current and possible future growth rates and given the role debt markets have traditionally played in financing investment 8212; in the West, it is the dominant funding source 8212; this is an anomaly that can cost the economy. Dr Singh spoke of deeper financial sector reform in the context of a more mature debt market. One typical reaction in Delhi to this observation in Mumbai would be, but will the Left allow it?
