Growth story to remain vibrant

By agencies   |   Tuesday, 23 May 2006, 07:00 Hrs
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NEW DELHI: Within hours of trading being suspended on the stock markets after the 1,100 point crash this morning; Finance Ministry officials went into an emergency huddle with the Union Finance Minister P. Chidambaram. In fact, officials like joint secretary in charge of capital markets K. P. Krishnan and Economic Affairs Secretary Ashok Kumar Jha were on their toes throughout the day.

At an urgent press briefing held an hour before the markets closed, Jha said that ’reports received by the Ministry’ indicated that FIIs and mutual funds are net buyers since this morning.

Jha said, “It appears that some brokers trading on the proprietary account may have come under margin pressure and, therefore, may have sold. The Reserve Bank of India has made it clear that Banks have been advised to provide ample liquidity to those who may require money to meet margin requirements.”

Jha also reiterated that the draft CBDT circular that purportedly spooked the markets, made no reference to FIIs. ‘‘FIIs are governed by separate provisions of the Income Tax Act and the relevant Double Taxation Avoidance Agreements (DTAAs),’’ he pointed out.

Trying to allay the murderous mood on Dalal Street, Jha also reeled out some numbers to underline that ‘the Indian growth story remains a vibrant growth story’. He reminded that ‘‘the GDP growth rate in 2005-06 is estimated at 8.1 percent and the growth story is expected to continue this fiscal too.

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