Turmoil ‘storm in teacup’, says Fin Secy

NEW DELHI: The stock market turmoil created by rout in Adani group shares was a “storm in a teacup” from a macroeconomic point of view, Finance Secretary TV Somanathan said on Friday, emphasising that India’s public financial system is robust.

The stock market movements were not the government’s concern per se, he said, noting that there were independent regulators to take necessary action.

When asked about the impact of the fraud allegations against the Adani group on the financial system considering banks and insurance companies’ exposure, Somanathan said India’s public financial institutions were robust.

“There is absolutely no concern from the point of view of financial stability, either for depositors, policyholders, or anyone holding shares in these institutions. The share of any one company is not such as to create any impact at the macro level. So there is absolutely no concern from that point of view,” he said. Asked if the market turmoil would impact revised estimates of disinvestment collections, Somanathan said these gyrations do not affect the macro economy.

“From a macroeconomic point of view, this is a non-issue. It’s a complete non-issue from our point of view. It’s a storm in a teacup as far as macroeconomics are concerned, not in respect of markets.” The government’s concern is creating the right investment environment, a well-regulated financial market, and making sure there is transparency, that the information asymmetry is reduced, and the macroeconomic policies are sound, Somanathan said. Since Jan, the Sensex has slumped by over 1,000 points. ↔ More on P10