Equity markets are strategically more important to India than ever before. If Rs 57 lakh crores are required in the current five-year plan for infrastructure development, then at least half of it will come from the private sector. This, in turn, will depend on the public to raise funds against the projects being lined up.
The function of equity markets is fair allocation of capital and becoming one of the chief gateways of accessing capital. It also makes sense that those who will gain the most in the end, the citizens, should invest in their future and reap the benefits.
Also read: Indian market at mercy of FIIs; global cues key: Udayan
But finance is tricky. There will always be a struggle for access as companies try to attract investors. They, in turn, look for the safest option with the highest potential return.
The uncertainty of supply will encourage companies to leave more on the table during IPOs (Initial Public Offer) -- a lesson well-learnt in the last several months.
Its impact on our economy could be significant as the availability of finance to underwrite our growth will be a deciding factor in our quest to become one of the prosperous and largest economies of the world.
The ability of local companies to execute these projects while competing with global one, the geopolitics that will determine the flow of international finance; both have the potential to transform our economic landscape. After all, the US does look to us as a strategic bulwark against a rampaging China in the region.
This growth will finance our future for the decades thereafter, making this strategically, the most important decade for India especially, as we are already on a relative roll - notwithstanding the downward slide in GDP.
This will fund our increasing costs including growing oil imports from just over 1 barrel per person per year to 3 within a decade. Plus, there is no telling to the price of oil then. The absolute numbers are staggering and will affect global demand and supply.
Similarly, we have migration or people in millions moving from rural areas into cities. This is one of the reasons driving the current construction boom. If we are to prosper, the perspectives need to be changed when required.
There will be a need to be nimble in redirecting policy and investment strategy as and when required due to transformations within the country.
One has to be politically wise with long-term purpose. This strategy has to be treated as a long term exercise and not as a crisis du jour. It is also complex because as the economies become more integrated and nations more interconnected, the path of globalization, privatization and deregulation which we put ourselves on in 1991 has become more relevant.
This decision was singularly responsible for unshackling the economy and turning India into a high-growth nation and an increasingly important part of the global economy.
Our trade with other countries has grown faster than the global economy itself and we have morphed from a developing nation into an emerging economy while becoming one of the fastest growing countries in the world.
Our strength in technology has helped but more as a service provider to the world than as a domestic implementer - a huge gap yet. This decade will see the real rise of internet in India riding on the dramatic fall in the cost of communications.
In fact, 1991 has been followed through with a period of innovation and expanded capabilities and we have been on the fast track in terms of economic growth. But obviously not fast enough or deep enough or wide enough - yet.
The financial services industry in India has always been innovative, even though stymied by successive governments and restrictive regulation till 1991. So while futures and options were officially allowed only in 2004, there were participants who would wager "tezi - mandi" unofficially right through the previous years.
Entrepreneurial daring has also been a hallmark over the years, witness companies like Reliance, Infosys and Bharti Telecom which broke new ground and became the favourites of Indian investors.
Of course, political battles and controversy, disappointment and despair have inevitably been around to complete the markets, the Satyam case comes to mind immediately.
Then recovery and luck too have played a part, making up for the opportunities gone by. Some of our largest companies, like ONGC, have become global industries and have simultaneously reached a testing point in terms of managing scale and large cross-border enterprises.
Of course, our companies have to operate against extremes of expectations which vary by the year and one has to stay sober and keep one's balance.
So when will the Nifty cross 6600 or more? Everybody is in a slow mood right now but that there are several factors in favour. Remember that India will continue to get allocations as long as we show promise - irrespective of whether the west is in economic trouble or growing.
There are no meltdown fears now in global markets and confidence is returning; our valuations are reasonable. Nifty price to book is at multi-year lows, domestic interest rates and inflation are likely to soften, FII flows have been healthy so far and eventually India remains one of the few stable countries which can offer double-digit returns to investors this year - following up on 27 percent returns in 2012.
The recent currency devaluation as well as the stock market response to this circumstance are done for now. So, disclaimers in place, a Nifty level of 6600, if not more, by the year end seems more imminent than ever before. What sounds challenging today is likely to be tomorrow's reality!
The writer is the President - Retail Distribution, Religare Securities, and the views expressed are personal.