Govt examining if Sebi took adequate action in NSE matter: Nirmala Sitharaman

She said the government was analysing if there had been “enough application of mind in dealing with this” on the part of the market regulator, and if after applying its mind, Sebi took adequate corrective steps. This is the first public statement from the government on the issue.

The government will not entertain or tolerate any perception among investors about opaqueness and credibility at institutions, she said in the course of a wide-ranging interview.

Asked about the need for further strengthening the regulatory framework, the minister said the question is if Sebi, with its existing regulatory powers, handled the incident “adequately and properly”. “And my worry is that the perception outside is probably that they have not. I’m not saying it’s my view. I need to see it,” she said.

The minister, however, asserted that the government did not intend to weaken any institution. “We can’t do anything which is going to hurt them from the point of view of their image or their perception. Yet how did NSE look the other way when things were not really happening transparently?” she said.

Tackling Inflation

Asked if the Reserve Bank was behind the curve with regard to monetary tightening in view of the likely interest rate hikes by the US Federal Reserve, she said there is an understanding between the government and the RBI about being watchful of what’s being done by the US Fed or the European Central Bank (ECB).

“The two of us are seized of the matter and lessons of the taper tantrum have been more than once read through. We shall avoid mistakes of that kind,” she said.

Further, the nature of the inflation problem facing India is quite different from that confronting the Fed and the ECB, as the latter were experiencing significant price rises after decades.

“Inflation (in India) is not much beyond the band that we should be considering… So actually speaking, the picture there and picture here have different colors and hues. The ways in which we have to handle it will have to keep those differences in mind, not exactly reflecting the steps that they’re taking; but of course (we) can’t suffer for the mistakes they may make,” Sitharaman said.

Responding to a question on why, more than seven years into its tenure, ministers kept referring to the UPA years, Sitharaman said the extent of corruption then was such that it needed constant reminding. She also questioned former Prime Minister Manmohan Singh’s latest statement criticising the economic management of the government, saying that Singh had turned a blind eye to the 2G and coal scams, the Antrix-Devas contact, where India has lost arbitration cases, besides allowing BSNL and MTNL to be weakened. Further, the PM “did not question” his finance minister on what was happening at the NSE.

“Dr Manmohan Singh…as a prime minister did not even question his own finance minister as to what was happening in NSE. And, these are people who stand up and ask PM Modi about how to handle the economy…PM Modi doesn’t know to game the economy for personal benefit, which is what they did,” she said, adding that Singh chose to speak only when there was an election in Punjab.

On the Ukraine crisis, the minister favoured a diplomatic solution, saying the world could not afford a military confrontation.

“I think we have made our stand very clear that we want a diplomatic solution to it, particularly as the economies are coming off the pandemic. We cannot afford a crisis. I look forward to having a solution in hand, a quick, diplomatically settled solution,” she said.