The survey also proposes bringing all financial market regulations under one entity — the Securities and Exchange Board of India (Sebi) — with a view to encourage development of an integrated policy framework.

According to the survey, high net worth individuals (HNIs) should be allowed to register and invest directly through authorised Indian investment intermediaries. It advocates banning of indirect routes of investment such as P Notes.

The survey also contains a number of suggestions for reforming debt markets. “Broaden and deepen the long-term debt market by liberalising investment norms for insurance and pension funds, and through the development of credit enhancement institutions. The government can consider a guarantee mechanism (a fund) for credit enhancement of long-term infrastructure debt. Moreover, tax incentives for long-term debt markets can be considered,” the survey says.

In a move that would benefit the corporate debt market, the survey has asked the government to introduce or allow repos and derivatives in corporate debt.

The survey also urges lifting of the ban on futures contracts to facilitate price discovery and risk-management. It also favours developing the spot and futures currency markets (exchange traded) further. “Extend spot commodity trading in electronic form to agricultural markets by involving agriculture product marketing companies (APMCs),” the survey says.

Innovative steps like the introduction of exchange traded interest rate derivatives — such as interest rate swaps (IRS) — are also proposed in the survey. “Introduce standardised credit default swaps that can be traded on exchanges, subject to stricter-than-normal limits on eligible participants,” the survey suggests.

The survey also talks about aligning voting rights in banks with equity holdings. Moreover, it urges greater public holding in the equity of public sector banks with the objective of maintaining social control of management. Further, it says: “Allow trading of directed credit obligations among banks and other financial institutions. This will allow and encourage the development of financial institutions that can specialise in and exploit economies of scale and scope in unbanked or low-banked areas and sectors.”

To do away with the current rigidity in interest rates of small saving instruments (which don’t decline in tandem with the fall in interest rates within the economy), the survey advocates linking small savings rates to government debt instruments or bank deposit rates of similar maturity.