Despite huge fluctuations, the Indian stock market has “maintained a certain level of sanity” and it should be given the freedom to play on its own, said Union finance minister Nirmala Sitharaman on Friday.
Speaking at the India Today Conclave, Sitharaman said she will put her trust in the market. “I will let the market play on their own, as much as some people observe our stocks are overvalued. But as we can see despite global fluctuations, the Indian market has maintained a certain level of sanity and I will put my trust in the Indian stock market.”
This comes amid backdrop of the capital markets regulator Sebi raising concerns about possible overvaluation of small- and mid-cap stocks, indicating possible market manipulation and the risk of a market bubble.
“There are pockets of froth in the small and midcap space in the equity markets that have the potential to become a bubble and burst affecting investors,” Sebi chairperson Madhabi Puri Buch had said.
She also highlighted the growing confidence in the equity markets among the citizens of the country. “People today are also going to the stock markets not just through mutual funds but through demat accounts. In fact, India stands out as one of the countries where retail investors are putting their savings into stock market rather than going for savings schemes,” the FM said.
Meanwhile, she reiterated the government’s opposition to the crypto currencies. She said cryptos cannot be currencies and that’s the “position of the central government.” Currencies are to be issued by the government or the central bank of the day, she added.
Sitharaman also said on March 15 that scrapping of electoral bonds scheme by the Supreme Court was an improvement on the past but a more transparent system should be put in place.
Her comments came a day after the Election Commission made public names of companies and individuals who had donated crores of rupees to political parties under the system that had kept their identities secret.
Sitharaman rejected criticism that the system, introduced in 2017, had led to graft, patronage of businesses and crony capitalism across political parties, but said lessons had to be learnt.
"It is not a perfect system. But you moved from almost a wild law unto oneself kind of situation, where everybody did what they wanted," Sitharaman told the India Today media conclave. "This is certainly not perfect. But one bit better. We have to introduce elements of lessons that we have taken from this, to make sure there is transparency."
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