The Securities and Exchange Board of India chief U.K. Sinha said that it was too early to analyse whether the large outflow of foreign funds from India could be linked to the country’s demonetisation move.
Mr. Sinha had said that between October and December, 2016, around $ 11 billion of foreign portfolio investment went out of India . “ This is no small amount .. earlier the market and the rupee would have sunk, but now they have acquired inherent strength.”
The SEBI chief said it was too early to analyse whether this was due to demonetisation as this (the funds outflow) had happened on a day when many across the world pinned hopes on U.S. getting onto a high-growth trajectory (coinciding with Donald Trump winning the elections). “ Many felt that dollar would strengthen and so money went there,” he said.
Mr. Sinha was addressing the members of the Bharat Chamber of Commerce here.
On IMF revising India’s 2016 growth figures, he said that the agency had also said that growth rates would improve by 2017 and India would catch up with China next year as the fastest-growing emerging economy.
To a question on regional stock exchanges, he said that they have become obsolete and were bound to fail.
Guidelines have been framed for their exit and many including the Madras Stock Exchange have exited. He also said that SEBI is unable to give any special dispensation for the Calcutta Stock Exchange.
He mentioned that the city and the eastern region figured high in the incidences of ponzi schemes. A central legislation was in the pipeline for regulating companies taking deposits such as chit funds and nidhis .
Now a co-ordinated effort has been mounted with interaction between Reserve Bank of India, the Securities Exchange Board of India and the respective State governments to interact and take necessary measures to stop the proliferation of such companies, he said.
