India has been ranked 36 out of 60 of the worlds leading financial systems and capital markets,up marginally from 37,according to the Financial Development Report 2011 released on Tuesday. The report is published annually by the World Economic Forum and 2011 marks its fourth year. Particular strengths lie in Indias non-banking financial services (5th rank),IPO activity (5th),insurance (7th),and securitisation (4th) being the primary drivers of the respective pillars high score. Indias is strong in financial intermediation and has been ranked 15th in foreign exchange,and 20th in derivatives markets. However,a low level of financial sector liberalisation (56th),an inability to enforce contracts (57th),an underdeveloped infrastructure (56th),and a high cost of doing business (55th) all contribute to a weak institutional and business environment (both ranked 54th). Weakness in financial access (47th) is a reflection of Indias lack of retail access to capital (41st),the report said. Findings of the report also indicate significant variance in the scores related to financial intermediation. Considerable decreases in non-banking financial services and financial markets scores across the majority of countries raise the question as to how firms will be able to access capital on a sustainable basis. This year,Hong Kong overtook the US and the UK to top the list. Hong Kongs position was bolstered by strong scores in IPO activity and insurance.
