msmes. at its core will have to be a robust corporate bond market with adequate secondary market trading liquidity and breadth. external financing will play an increasingly vibrant role in propelling investment and bringing in new technologies, provided the absorptive capacity in respect of external funding expands with the pursuit of reforms that enhance export potential and attract fdi. in india ’ s quest for higher levels of development, financing should be seen as a facilitator, not an obstructer. as walter bagehot, the enunciator of the core dictum of central banking, wrote in his lombard street, ‘ the less money lying idle, the greater is the dividend ’. 31 circling back to where i began on the relationship between finance and growth, i can do no better than to quote the late anand chandavarkar, among the finest upholders of the 29 india requires investment of up to us $ 23 billion by 2025 in physical digital infrastructure to support the growing demand of digital services and rising online traffic ( ernst and young and digital infrastructure providers association ( 2022 ). digital infra co – unlocking the tower power. january ). 30 rbi internal estimates. 31 bagehot, walter, 1873, lombard street : a description of the money market, new york : scribner, armstong & co. hallowed tradition of practitioners of the economics profession in the rbi 32 : “ the debate about whether financial intermediation and development is a " demand - following " or a " supply - leading " phenomenon is comparatively subsidiary to the question : whether ( countries ) have the necessary insight and economic statesmanship to adopt appropriate policies? ” thank you. 32 chandavarkar, a., how relevant is finance for development?, imf e - library, https : / / www. elibrary. imf. org > article - a004 - en. jagdish bhagwati described anand chandavarkar as “ in a class by himself, a bibliophile, an intellectual, a gifted writer, and a superb economist, and all this without arrogance and with a lot of grace and charm. ”

development of viable capital markets – – the indian experience by dr. viral v. acharya, deputy governor, reserve bank of india ( rbi ) 1 1. introduction 1. 1 capital markets play a crucial role in the economic development of a country. they provide financial resources required for the long - term sustainable development of the economy. development of viable capital markets is therefore considered an important element in the macro - financial policy toolkit, including for objectives such as financial stability and the transmission of monetary policy. 1. 2 the committee on global financial system ( cgfs ), which meets at the bank for international settlements ( bis ), constituted a working group in 2018 - 19 to examine global trends in capital market development, identify various factors ( legal, institutional, structural and conjunctural ) that foster the development of robust capital markets, and consider the role of policy including prudential measures. the working group, co - chaired by the people ’ s bank of china ( pboc, dr. li bo ) and the reserve bank of india ( rbi, dr. viral v. acharya ), focussed on issues primarily related to the development of markets in bond and equity securities 2. while these issues are arguably of greater relevance to emerging market economies, they were found to be of significant interest even for advanced economies. 1. 3 the cgfs report identified the drivers of capital market development and categorised them into two types : ( i ) drivers which create an enabling environment for financial development, and ( ii ) drivers which are more capital market specific. these remarks collectively summarise the presentations made earlier at the rbi symposium on establishing viable capital markets, 29 may 2019 ; the institute for indian economic studies ( iies ), tokyo, japan, 10 june 2019 ; the meeting with foreign portfolio investors, tokyo, japan, 11 june 2019 ; the national university of singapore ( nus ) asian leaders in financial institutions ( alfi ) programme, bengaluru, 20 june 2019, and fireside chat at the indian school of business, hyderabad, 29 june 2019. the report was delivered to the cgfs at the bis meeting on 23 january 2019 and is available at https : / / www. bis. org / publ / cgfs62. pdf 1. 4 drivers which create an enabling environment as identified in the cgfs report include : – macroeconomic stability, – broad respect for market autonomy, – fair and efficient legal and judicial