Tips on the street

The jury seems to have unwillingly indicted the American Dream, but it has protected its basis,capitalism. In turn,market capitalism is based on the rule of law,without which there would be no investor confidence. The fate of Gupta,one of several market professionals of South Asian origin recently indicted in the US where over half of the population is invested in the market holds a lesson for India. Here,lack of awareness,confidence and trust have stalled market participation to just over two per cent of the population.

India developed a strong regulatory framework after the Harshad Mehta and Ketan Parekh scams,but market information remains a grey area. Private tip-offs,media investment advice without adequate disclosure and the slowness of the courts reduce investor confidence. Stakeholders should voluntarily collaborate to create a culture of propriety and transparency that encourages investment. Swift action against those who break the law after a fair and impartial probe instils confidence in the investor and the market. Otherwise,markets remain skewed,making it very difficult for small investments to reach the critical mass needed to sustain the growth story.