Rahul Gandhi seeks JPC probe in "biggest stock market scam"; BJP hits back

Rahul Gandhi

The BJP on Thursday hit back at Rahul Gandhi's allegations relating to connection between "BJP, exit pollsters and dubious foreign investors" and accused the Congress leader of "conspiring to mislead market investors". Addressing a press conference, Union Commerce Minister Piyush Goyal said that the Congress leader "has still not overcome the opposition's defeat" in the Lok Sabha elections. Several opposition parties had come together to form the INDIA bloc to take on the BJP-led NDA in the Lok Sabha polls, reported news agency ANI.

Rahul Gandhi had alleged that Prime Minister Narendra Modi and Home Minister Amit Shah had given "investment advice" to people during the campaign for the Lok Sabha polls and there was a loss of lakhs of crores to retail investors also due to "fake exit polls". He demanded a Joint Parliamentary Committee probe into the "biggest stock market scam", reported ANI.

Goyal said in the past ten years of PM Modi's government, the market capitalization of Indian stocks crossed USD 5 trillion. "Rahul Gandhi has still not overcome the loss in the Lok Sabha Elections. Now, he is conspiring to mislead the market investors. Today, India has become the fifth-largest economy," he said. The union minister alleged that Rahul Gandhi wants to instill "fear in the minds of both the domestic and global investors, so that they do not invest".

"We all know equity markets react to various estimates and predictions during any elections, or for that matter any forecasts by banks and institutions. Ups and downs are normal even during a non-event," he said. In May this year, market caps of both BSE and NSE-listed companies touched USD 5 trillion. Market capitalisation or market cap is the total value of a company's stock, derived at by multiplying the stock price by the number of its outstanding shares, reported ANI.

Indian stocks market entered the league of top five stock markets globally, Goyal said, adding that m-cap of PSU companies has risen four-fold over the past years. Indian investors, particularly the retail investors, have benefitted from the rise in stock indices over the years, he said. "Retail investors are not just bystanders today, but are participating in it," he said. FPI holdings in India was 21 per cent during UPA days and it has dipped to now 16 per cent, he said. At the same time, Indians investing in stock markets have gone up, reported ANI.

"India is considered a well-regulated market, and SEBI has received several appreciations worldwide," Goyal added. He said India was referred to as "among fragile 5" during the rule of Congress-led United Progressive Alliance and that the country was now the fifth biggest economy. The term Fragile 5 was coined by a Morgan Stanley analyst in 2013, which referred to a set of five emerging countries, including India, whose economy was not doing well back then. The other four countries were Brazil, Indonesia, South Africa, and Turkey.

"The size of the mutual fund industry was only Rs 10 lakh crore in 2014, today it has increased more than 5 times to Rs 56 lakh crore. Through mutual funds, Indian investors especially small investors are taking advantage of this growing market today and these small retail investors have ensured that India's ownership today has instantly become more than the ownership of institutional investors...," Goyal said, reported ANI.

"In April and May, when the market was rising, foreigners sold in the market and Indian investors took advantage of it and bought it. The benefit of this rise in the last two months has been received by Indian investors," he said, referring to the latest outflows by foreign investors. In April and May, FPIs were net sellers in Indian stock markets, data showed, reported ANI.

"When the results came on the June 4, when the market fell, foreign investors sold at a low price and Indian investors bought it with the belief that Modi government is coming and we will take advantage of it. So foreigners bought at a high price and sold at a low price. Indian investors sold at a high price and bought at a low price. So in a way, Indian investors earned even in this period. No one suffered a loss," Goyal said, adding that the retail investors benefited during the period. In his remarks, Rahul Gandhi demanded a Joint Parliamentary Committee (JPC) probe, terming it the "biggest stock market scam." Addressing a press conference, the Congress leader said that after 'fake' exit polls, stock markets rose, and then crashed on June 4, reported ANI.

"For the first time we noted that during the elections, the Prime Minister, the Union Home Minister and the Finance Minister commented on the stock market. The Prime Minister said that the stock market is rising at a great speed. the Union Home Minister said that on June 4 the stock market will be on the rise and you all should invest and similar was said by the Finance Minister...Amit Shah says buy shares before June 4, 19 May PM Modi says the stock market will break records on June 4. Why did the PM, Home Minister give investment advice to investors," Rahul Gandhi had said, reported ANI.

Indian stocks witnessed a bloodbath on the day the Lok Sabha results were announced, where incumbent BJP performed below par and seemed it may fall short of exit poll predictions and the majority mark on its own. Many investors booked their profits they accumulated from the gains they made a day after the exit poll predictions indicated comfortable majority for BJP. Sensex declined by a whopping 4,389.73 points and Nifty by 1,379.40 points on the results day. Much of the losses have been recovered over the next two sessions.

(With inputs from ANI)