A finance ministry official says "If foreigners are allowed to invest directly in India, volatility will go down in Indian markets". I am completely unable to understand this.
Like I cannot understand what is wrong with Intra day or Intra month volatility! Markets have always been volatile — the question is how volatile that is all. We should also stop this excessive 'foreign' syndrome. The hangover of the gora just refuses to go away.
Let us look at FDI in retail. We allowed FDI in banking — we now have only foreign banks in India — other than the PSU banks that is. Has it helped in banking? We have had FDI in mutual funds — at least for the past 20 years — has it helped in penetrating the rural markets? We have FDI in life and general insurance….same answer is it not? L O L.
Then we thought we need FDI in retail (I guess this was a ploy to hold the real estate price high) — but somebody said it was to tackle the runaway valuation of the US dollars!!
Now imagine the foreigner wanting to invest in India. He will want data regarding say the last 10 year's working (maybe in XBRL format), he will want some independent research reports (we do not have them at all), he will want to open a brokerage account (forget opening, I am unable to get ICICI direct to activate my wife's brokerage account for the past 12 months!) it requires some effort!
First increase the number of investors in India (I am not sure whether we have 100,000 investors or 1,000,000 investors — Sucheta Dalal versus Sebi!!) — whatever the figure, we need to double it a couple of times at least. Once we do that we can get the goras. Let the Indians invest in India first, then the goras can come…what is the hurry??