Elaborating on prospects for domestic capital formation in emerging markets in the wake of foreign investment withdrawal Mr. Shankar Jadhav, Head – Strategy, Bombay Stock Exchange Ltd said that the Government and SEBI should encourage investments in equity and debt markets. A slash on Security Transaction Tax may make investments in equity markets a viable option. Listing of SMEs on the exchange enables an opportunity to raise equity without offering effective collateral. Also, it enables branding and marketing of the listed SMEs by broadcasting information in the press and websites, Mr Jadhav said.Commenting on the overtly optimistic growth prospects for the global economy and fears of capital flight Mr. Jairaj Purandare, Chairman, JMP Advisors Pvt Ltd. said that the last few months have demonstrated the preparedness of the Indian Government and the RBI in dealing with capital flight. The fluctuating Indian Rupee has been stable in comparison to other emerging market currencies. However, the future scenario for the Indian economy depends on the emergence of political stability, control of inflationary pressures and generating business confidence. Earlier, in his welcome remarks Mr. Vijay Kalantri, Vice-Chairman, MVIRDC World Trade Center and All India Association of Industries said that the economic activity has demonstrated gradual recovery in the US and the European markets. The same accompanied by structural and political issues in India may prove fatal for its growth prospects. Transparent policies, political stability, impetus to infrastructural sector and investment proposals, curbs on inflationary pressures and a stable currency will improve prospects for the economy in the near future. The same will serve vital in making India an attractive foreign investments destination, Mr. Kalantri advised.