Seems like MIDCPNIFTY is joining the bandwagon of illiquidity with FINNIFTY. Everyone though that Tuesdays expiry will induce traders to take part in the midcap F&O but the index seems be extremely illiquid.
I have heard (not very sure though) that many exchanges such as CBOE have market makers in derivative segment (Cboe European Derivatives Liquidity Provider Program). It is high time that this becomes a norm in the Indian markets too. Illiquid contracts are also used in tax evasion apart from causing wrongful losses.