New Delhi [India], May 12 (ANI): NK Singh, President of the Institute of Economic Growth and former Chairman of the 15th Finance Commission, stated that developing a deep bond market is necessary to restructure India's financial resources.

Speaking to the media on Monday, Singh explained that the development of a bond market stands out as a solution to the long-term financing needs of the infrastructure sector. By shifting this burden away from commercial banks, the financial system can avoid the foreclosure of resources that often hampers credit flow to other sectors of the economy.

'Along with some of the other measures that foreclose a large part of our resources, the need to develop a deep bond market so as to free up the resources of the commercial banks and use the deep bond market to finance the infrastructure, whereas the commercial banks would then concentrate on the other banking lending activity,' Singh stated.

Singh noted that the banking sector remains central to the national growth trajectory. He pointed out that the Union Finance Minister signaled a commitment to structural changes during her budget speech by announcing the formation of a new banking committee.

'The major highlight was the fact that banks play a vibrant role in India's growth trajectory. By the availability of capital, cost and efficiency of financial intermediation, bringing about the next steps on the reforms of the banking sector, the Finance Minister, in her budget speech, announced the constitution of a new banking committee,' Singh said.

According to Singh, the committee may also need to revisit existing frameworks that currently lock up significant financial resources.

'Some of the issues which we discussed could constitute the areas where this committee could look into. The chairman of the Prime Minister's Economic Advisory Council, Mahendra Dev, in a very learned article two days ago, pointed out that some of the areas like the norms of priority sector lending, what should constitute priority sector lending, could be a subject which this committee should consider,' Singh added.

In addition to technical financial reforms, Singh 'also felt that the speeches of both Chandrababu Naidu and Yogi Adityanath were very far-reaching and visionary.' (ANI)