Stock market rally ‘not a blip’: Finance minister Nirmala Sitharaman
Finance minister Nirmala Sitharaman feels there is a definite positive sentiment in the Indian economy and that’s not entirely because of the stupendous stock market rally that has pushed benchmark indexes to record highs.
Sitharaman also believes a “paradigm shift” is happening in the way investors and small savers are looking at their savings in a “completely different way”, as is evident from the gush of money into stock markets.
The comments on a day when the benchmark BSE Sensex climbed above 56,000 for the first time while the Nifty50 breached 16,700. The 30-stockSensex and the Nifty50 have more than doubled from their lows of March 2020 when they had crashed due to worries related to the Covid-19 pandemic.
“I wouldn’t for a minute credit the positivity in the economy purely on the stock markets. There is definitely positivity,” Sitharaman said in an interview with The Economic Times.
Responding to a query whether there wasa disconnect between the stock markets and the real economy, she replied in the negative.
“No, I would say that is a matter of discussion which is going on. But it couldn’t have sustained itself through 2020 Covid and through the second wave [of] Covid and enter into the second half of 2021. So, it’s not a blip is what I feel,” she said.
On inflation and RBI policy
Sitharaman said that the Reserve Bank of India is unlikely to withdraw the excess liquidity in a hurry even though it was concerned about the impact of high fuel prices on inflation.
She said the government has been closely monitoring the prices of several items, including perishable commodities and seasonal products, and that both retail and wholesale inflation numbers have started coming down.
On privatisation and disinvestment
Sitharaman said the government has working to privatise Bharat Petroleum Corp Ltd (BPCL) and national carrier Air India, and hopes to complete the process by the end of the year.
She said that the government has to conduct “far more due diligence” when it divests any assets and that there is a “complete unglamorous backdoor” work. “We are going steadily, but surely,” she said.
The government is also working to privatise two state-run banks, as announced previously, and sell a minority stake in general insurance companies, she said. The planned initial public offering of Life Insurance Corporation is also on course, she said, adding that the government will maintain a minimum in life, general and reinsurance segments.
Responding to a query on whether the government was looking to reduce the Goods and Services Tax (GST) or rationalise the slabs, Sitharaman said there was a need to wait a bit longer.
She said that, purely from the revenue generation point of view, the time may have come to rationalise the slabs and rates. But from the point of view of reviving the economy, it wasn’t the right time, she said.
Sitharaman said the government’s stand on cryptocurrency hasn’t changed. But she admitted that it’s a very big potential area and a lot of global developments are happening.
“We are not saying no to cryptocurrency. We are saying we’ll have to see how this technology can help fintech to maximise the potential that it has,” she said. “But how sophisticated regulation can be is something which I want to work with the Reserve Bank. I can say the work is nearly complete. It is now for the cabinet to go into it.”
Share Market Today
|Indices Name||Price||Price Change (% change)|
|S&P ASX 200||7056.20||-13.7 (-0.19%)|
|CAC 40||7184.82||-29.08 (-0.4%)|
|Dow Jones||33963.84||-106.58 (-0.31%)|
|FTSE 100||7683.91||5.29 (0.07%)|
|Hang Seng||18078.69||432.91 (2.45%)|
|US Tech 100||13216.81||-47.17 (-0.36%)|
|Nikkei 225||32402.41||-168.62 (-0.52%)|
|S&P 500||4320.06||-9.94 (-0.23%)|
|Gift Nifty||19642.50||12.5 (0.06%)|
|Shanghai Composite||3132.43||47.73 (1.55%)|
|Taiwan Weighted||16344.48||27.81 (0.17%)|
|US 30||33976.00||-73.1 (-0.21%)|
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