In a hard-hitting reaction in an interaction today, Bombay Stock Exchange (BSE) CEO Ashish Chauhan took a strong stance against the misuse of markets by participants and said, “Can’t allow stock markets to be misused for tax evasion.” He added that quick solutions need to be found and indicated what would be required to be done by the government to prevent this by saying, “Relook in law needed to check loopholes in capital gains tax exemption framework”.
He then turned and pointed out the sweet spot that the Indian markets are at the moment. He said, “Funds to be raised through BSE alone in current fiscal estimated at $28-30 billion.” And more than that, he indicated that the future of the equity markets in India is just as good if not better as they will continue to draw investors in droves. Chauhan said, “Indian markets can help raise $100 bn a year and help meet half of India’s funding needs; banks can arrange the rest.”
“India will need USD 2-2.5 trillion of funds over the next ten years and for that the exchanges would also have to stand up and get counted. India cannot raise funds only through banks. “So, if half of the funds are raised through markets and half through the banks, then a trillion dollars would have to be raised through the exchanges, whether from the GIFT City (international financial centre) or from the domestic exchanges. “Raising USD 1 trillion over a ten-year period would mean nearly USD 100 billion a year. As of now, BSE alone is helping raise from equity and debt put together, nearly USD 28-30 billion for the current fiscal. It’s not yet close to USD 100 billion, but that target is doable,” he said. Chauhan said there is also a need to ensure that the entire paraphernalia, in terms of peripheral systems, also keeps pace.
Asked whether there was the right kind of infrastructure for such kind of fund raising activities, he replied in affirmative.
(With PTI inputs)