Retail investors trusted India’s stock market and shielded it from shocks: FM Sitharaman

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Union Finance Minister Nirmala Sitharaman said Indian retail investors had trusted the stock markets and created such capacity to cushion the blow from the outflow of foreign funds which could have created the market volatility . In response to a question posed to the Lok Sabha, Sitharaman said India remained the biggest recipient of FDI.

Interest rates are the key drivers in terms of inflows of Foreign Portfolio Investors (REITs) and Foreign Institutional Investors (FIIs), who depend on them and can be attracted by better interest rates and prospects in other countries, the finance minister said in her response to a question posed by Congress leader Shashi Tharoor on Monday. Foreign investments need to be assessed, not just by looking at FIIs and REITs which by nature are interest rate dependent and continue to “rise and fall”, she added.

“In fairness and objectivity, if the inflow of FDI remains unchanged and India has been the largest recipient of FDI since before covid and it continues significantly even during covid and afterwards as well, it indicates that the money that comes in stays invested in this country, thus creating jobs and opportunities for us, not FIIs and REITs,” Sitharaman said in response to the question.

“FIIs and FPIs came and went. But, today, Indian retail investors have proven that even if they come and go, any shock that may arise is now taken care of due to the shock absorption capacity that Indian retailers have brought to the market. Indian market,” she said during Question Time. .

“We in the House should stand up and appreciate the Indian retailer who has invested a lot of faith in Indian markets today,” the minister added.

Tharoor, in his question, had urged Sitharaman to explain the worrying trend of “steady” decline in foreign investment in India, pointing out that foreign investors had so far pulled out of the Indian market for more than 1.14 lakh crore. . The veteran leader had also been searching for answers. on the measures taken by the government to reverse this situation.

“REITs and FIIs are obviously going to be very typical in their very nature and come and go. But, what needs to be looked at with fairness and objectivity is the inflow of FDI which remains unchanged,” Sitharaman said in his response.

“India has been the biggest receiver of IED since before covid and this continues very significantly during covid and afterwards as well,” she added.

“That’s what indicates whether the money that comes in stays invested in this country, creating jobs and opportunities for us, not by the FIIs and REITs,” the minister added.

In clarifying another issue, Nirmala Sitharaman said that the GST Board did not recommend reducing the health insurance rate by 18% even though the cost of it skyrocketed during the pandemic.

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