Capital market safe, says Sinha

By Our Special Correspondent

NEW DELHI, MARCH. 7. The Union Finance Minister, Mr. Yashwant Sinha, today assured parliamentarians and investors that there was no payment crisis at the Bombay Stock Exchange, and that the Indian capital market was ``absolutely safe''.

The crash of the stock market within two days of the budget presentation figured in both Houses of Parliament, and Mr. Sinha told the Lok Sabha that the Securities and Exchange Board of India was inquiring into whether the market had been manipulated or fixed by some cartel.

``I will share the findings of the SEBI inquiry once it is completed. At present, I do not want to make any statement as the probe is on,'' he said.

The BSE sensitive index (Sensex) had shot up by over 177 points to close at 4,247 points on Wednesday last when the budget was presented, and then plunged by almost 176 points the following Friday due to heavy speculative moves by some operators.

Demand for statement

In the Rajya Sabha, the Leader of the Opposition and former Finance Minister, Dr. Manmohan Singh, demanded a statement on the stock market crash, but was told by the Chair that the matter would be taken up tomorrow. Mr. Nilotpal Basu of the CPI(M) also raised the matter.

In the Lok Sabha, the Congress' Mr. S. Jaipal Reddy raised the issue during question hour saying the stock market had risen to dizzy heights immediately after the presentation of the budget but was now falling to ``fathomless depths''.

Accusing some brokers of ``manipulating'' the market, he said, ``this is causing turmoil. Our banks deposits and small investors are in jeopardy.'' Mr. Reddy was joined by his party colleagues, Mr. Mani Shankar Aiyer and Mr. Priyaranjan Das Munshi, and other Opposition leaders such as Mr. Mulayam Singh Yadav, Mr. Raghuvansh Prasad Singh, Mr. Rupchand Pal and Mr. Ajoy Chakravorty. Some ruling party members wanted action initiated against those spreading rumours which were causing panic in the markets.

Strong regulator

In his response, Mr. Sinha said the SEBI was a strong market regulator and had initiated an inquiry into the happenings of that ``black Friday.''

The Government was not concerned about the ups and downs in the stock markets which fluctuated because of various factors the world over. Its responsibility was limited to ensuring that the market was not manipulated and that the payment system was safe.

At another meeting organised by the CII, Mr. Sinha reiterated that there was no payments crisis and the capital markets were absolutely safe.

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