Sensex, the main index of the Bombay Stock Exchange (BSE), climbed by 14.3% this year, the best performance of the world's 10 largest stock markets by value, Bloomberg data showed. Growth in gross domestic product (GDP) of 8% is forecast for this year.
Ashishkumar Chauhan, deputy CEO of the BSE, said in an interview this week that the Indian economy, mainly driven by domestic demand, had recovered quickly from the financial crisis and remains an attractive destination for foreign funds. The BSE's Sensex is trading at levels about 5% lower than its pre-crash peak, he said.
More than 4900 companies are listed on the BSE, India's main equities exchange. Of these, about 4000 are small to medium-sized corporations. "Stock exchanges can play an important role in allocating capital to entrepreneurs," he said.
Chauhan said the Indian government was working to get more of the population, with a savings rate of 35% of GDP, invested in financial markets. Only 2% of Indians have investments in the stock market. Micro-finance is another large market for growth, he said.
More should also be done to move the economy away from its agriculture focus to manufacturing and services, he said.
The country has a robust manufacturing industry, he said. "We had to develop our own technologies. Because of that, Indian engineers, doctors and scientists are at the cutting edge of their fields," he said.
The chaotic preparations for the Commonwealth Games in Delhi have had little effect on business interest or investment in India, Jehangir Engineer, an economic adviser to the Tata Group, said this week.
"In the past fortnight or so we've seen foreign investment flows of $2-billion. I don't think the business environment is worried about the Commonwealth Games," he said.
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