NEW DELHI: The Financial Stability and Development Council (FSDC) has decided to take steps to make the corporate bond market more vibrant.
Reviewing the action taken on the decisions taken in the first two meetings of the sub committee of FSDC, the Council members meeting for the third time under the chairmanship of Finance Minister Pranab Mukherjee here on Wednesday, noted that the corporate bond market should be developed to enable the industry to raise funds for debt funds for infrastructure.
Among others who attended the meeting were D Subbarao, Governor, Reserve Bank of India, RS Gujral, Finance Secretary, R Gopalan, Secretary, Department of Economic Affairs, Kaushik Basu, Chief Economic Advisor, Ministry of Finance, UK Sinha, Chairman, SEBI, J Hari Narayan, Chairman, IRDA, Yogesh Agarwal, Chairman, Pension Fund Regulatory and Development Authority, Bimal Julka, Additional Secretary, Department of Economic Affairs, and Thomas Mathew, Joint Secretary, Department of Economic Affairs.
The council underscored the need to immediately establish the Infrastructure Debt Funds with a view to enabling the private sector raise half of the trillion-dollar outlay envisaged in the 12th Five Year Plan. It also discussed action taken on the decisions of the FSDC Sub-Committee, state of the Indian economy, short-term prospects and challenges, sovereign credit rating of India and monitoring financial stability.
On the state of the Indian economy, the general consensus was that while inflation may not be conducive to short-term economic growth, India’s medium to long-term economic growth prospects remain bright.
On the issue of sovereign credit rating of India, it was decided that it would be necessary for the government to strengthen its interaction with the rating agencies.