2011 Summary can be downloaded HERE - FT Live

Session Takeaways
16
There is a huge opportunity cost for lack of reforms. Deregulation of the financial sector should take place at
the right time for India to realize its true potential.
Borrowing costs remain high in India and there is a need for additional capacity creation
Asian papers carry a strong demand globally. If the environment is conducive, there will be no dearth of
capital coming into India
Some key reforms required include:
Innovative ways of financing infrastructure would be required to keep pace with India’s economic
growths
The large investments required for infrastructure development in India would need various foreign
sources of capital as domestic savings alone may not be sufficient
Efficient deployment of long term savings such as pension funds that are currently being managed
defensively
Reforms are required both on the supply side as well as the demand side. Public Private Partnership
(PPP) models that have worked well for the roads sector, should be replicated for other infrastructure
sectors as well
Development of the long term bond market
For SMEs, while there is systemic support, capital market reforms such as success of the SME exchange
can reduce cost of capital
Further granularity in the credit ratings would be required for better risk assessment by banks
Other sectoral reforms that are currently in the pipeline include Foreign Direct Investment (FDI) in the
retail sector, Goods & Services Tax (GST) etc.
With increasing pressure on healthy capitalization of banks, risk weighted assets are expected to be run
down globally
On a specific question related to using interest rate as a tool to fight inflation, Dr. Basu commented “In the
current global scenario where interest rates across various economies are significantly different, we can look
at other experimental models”