Mumbai, March 30 (IANS): As India does not have too many large domestic institutional investors, a well-endowed domestic pension fund will be the panacea for a robust and sustainable capital market, SEBI chairman U.K. Sinha said on Monday.

"A well endowed domestic pension fund in India will be the panacea for a robust and sustainable capital market," he said at an event organised by CII here.

According to Sinha, there is a large corpus of Foreign Institutional Investment and a huge window for long-term equity investment in the Indian capital markets for domestic pension funds which can reduce the vulnerability of capital markets.

Further, he urged the industry to look at National Pension System of Pension Fund Regulatory and Development Authority (PFRDA) as a social security option for their employees to ensure that large corpus of long term funds are made available for investment in capital markets.

"In spite of the new government's pro-development agenda, the enhanced investor confidence and a great budget, the primary markets in India have somehow not picked up till now," the Securities and Exchange Board of India chief said.

Speaking about alternate investment fund options available in India, he said the regulations related to Real Estate Investment Trusts (ReITs) in India are in line with some of the best in the world and has the potential to take up a substantial chunk of the capital market here.

"SEBI is coming out with regulations on Municipal Bonds very shortly and these bonds will play a very important role in the aspirational 100 Smart Cities mission of the government," he said.