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Stock plunge a `manufactured crisis', says FM

Special Correspondent

NEW DELHI: In a fire-fighting move after the damage had been done by way of the sharpest decline in the history of the country's stock markets, Finance Minister P. Chidambaram termed the plunge a "manufactured crisis'' and sought to lure foreign funds back with the assurance that no FII (foreign institutional investor) had been assessed as a `trader' for tax purposes.

Speaking to newspersons soon after the Bombay Stock Exchange (BSE) closed trading on Thursday with the Sensex plummeting by 826 points on reports of withdrawal by FIIs, Mr. Chidambaram said: "No FII has been assessed as a trader as they are investors and this is a manufactured crisis based on uninformed reporting.''

Uninformed reporting

Pointing out that the crash in the bourses was on account of uninformed reporting, the Finance Minister said: "There is a lesson for everybody. Uninformed reporting and reaction to uninformed reporting is not a desirable thing.''

Earlier, when the Sensex (BSE Sensitive index) was down about 500 points during the day, Mr. Chidambaram had chosen to downplay the sharp fall, saying "every movement and swing of the market does not require a comment.''

Meltdown in metal prices

Mr. Chidambaram noted that a reaction to the London Metal Exchange (LME) meltdown in the Indian market was understandable, "but what is not understandable is a reaction based on uninformed reports in newspapers,'' he said.

The Central Board of Direct Taxes (CBDT), Mr. Chidambaram said, had chosen a "democratic route" and placed the draft guidelines relating to income-tax on the website for eliciting the views of the stakeholders and the public.

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