Finance Minister, during his speech while inaugurating the Currency Futures Trading made a pertinent point.
Financial markets have continued to produce a multitude of new products including many new forms of derivatives, alternative risk transfer products, exchange traded funds and variants of equity. We in India have adopted all these slowly, some of these products but with considerable success. However, I may note that many years after these ideas were mooted we had to wait. For example, stock index futures took 5 years to be offered to investors after it was first conceived; exchange traded funds for Gold took 4 years to become a reality; interest rate derivatives though launched in 2003 have not taken off. These experiences highlight the risky environment that financial innovation faces in this country. This should change.
Galileo I believe said doubt is the father of invention; if I may add, doubting Thomases are impediments to progress. We need to continue to innovate and improve in the design of financial products.
