WHY INDIA FACES INVESTMENT CHALLENGES

THE Securities and Exchange Board of India published one of the most comprehensive investor surveys last week.

- RAJAS KELKAR

They interviewed 90,000 households across India. That is a significant number of people, assuming at least 3-4 people per household. The idea of the survey was to demonstrate that India is moving from a nation of savers to one of investors.About 63% households are aware of at least one securities market product, but only 9.5% participate. That means awareness is no longer an issue. It is the ability to have that confidence in securities investing. People are in a learning stage and need to build that confidence.

The lack of confidence stems from the predominant risk aversion among Indian savers. In the survey, most people described themselves as that. A primary reason is the perception that securities market products are complex. Most respondents have serious concerns about risk and return, and over half have trust and transparency issues.