Finance Minister Nirmala Sitharaman said that India’s economic image is not affected due to Adani Group’s recent decision to pull out Rs 20,000 crore FPO amid allegations of financial wrongdoings. The finance minister said there has been an accretion of USD 8 billion to the forex reserves in the last two days alone. FPOs (follow-on public offers) come in, and FIIs (foreign institutional investors) get out. The minister said there are “fluctuations” in every market but the accretion over the last few days establishes the fact that the perception of both India and its inherent strengths is intact.
She said the country’s independent financial sector regulators will be looking into the aspect and added that capital markets watchdog Securities and Exchange Board of India has the wherewithal to ensure stability in markets. The finance minister also said that the RBI has already spoken out on the issue, which said the banking sector is resilient and stable.
US-based short seller Hindenberg Research made a slew of allegations on the corporate governance front against Adani Group. The group has denied all the allegations and termed it as a calculated attack on India. It has cancelled the FPO even after managing subscriptions to it.
Finance Secretary TV Somanathan stood by his comment on the controversy where he called it a storm in a teacup, clarifying that this is in the context of macroeconomic terms and the stability of India’s public financial institutions. Sitharaman said there is no timeline which has been decided to end the old tax regime, and the government has only introduced a simpler new tax regime, which has the incentives of lower rates.
(With input from PTI)