FIIs can use their huge investments in corporate bonds and government securities to hedge the risks

The budget proposal to allow insurance and pension companies to directly trade in debt segment is a welcome move. This will allow institutional participation in the exchange-traded bond market, said Rajesh Sud, CEO and Managing Director, Max Life Insurance Co. Ltd.

The Finance Minister's assurance that Insurance Amendment and PFRDA Bills would be presented in this session and the proposal to set up a standing council of experts for reforms in the financial sector to compete internationally showed his commitment towards the financial services sector, he added.

“The Indian debt market is under-developed to a great extent, and the current budget has announced measures to increase the depth of the market by introducing a dedicated debt segment on the stock exchange,” said Manoj K. Kashyap, leader financial services, PwC India.

Insurance companies, provident fund and pension fund companies would directly gain access to this segment with the approval of the sectoral regulator. In addition, distributors of mutual fund companies would also be able to access the stock exchange by becoming members of the mutual fund segment.

“The Finance Minister has walked the tight rope, attempting to reassure the foreign investor by making the process of investment more transparent and uncomplicated, and, at the same time, encourage the domestic retail investor to invest more in financial assets,” said Robin Roy, Director, Financial Services, PwC India.