Economic Survey 2013: Challenges remain in making India preferred financial destination for foreign investors
The performance of domestic financial sector will depend on both short term and long term factors such as risk perception of investors, said the Economic Survey for 2012-13 tabled in Parliament.
"...there are still certain challenges in the development of the Indian financial sector which need to be addressed to make it an important avenue for productive channelisation of savings by domestic investors and a preferred investment destination for international investors," it said.
India has been a late starter in initiating reforms in the financial markets, which began in the 1990s.
"...the country now has one of the most vibrant and transparent capital markets in terms of market efficiency, transparency and price discovery process," the report said.
Last year, Indian market was among the top few performers in the world, mainly helped by foreign institutional investors. FIIs pumped in USD 31.01 billion into the domestic market in 2012.
The Survey said that economic and political developments in the euro zone and the United States impacted domestic and other markets.
"In the short run, factors like expectation of higher relative returns, risk perception of investors and global liquidity will decide the level of flow of funds to the
domestic equity market," it noted.
About Rs 13,050 crore was mopped up through equity issues till December, in the current fiscal. During the April-
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