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Sensex: BJP for JPC probe

NEW DELHI: Holding the government “squarely responsible” for the “blood bath” on the stock market here on Wednesday, the Bharatiya Janata Party demanded a joint parliamentary committee probe to identify who had benefited from the extreme volatility in the market witnessed over the last two days.

The demand for a JPC probe was immediately rejected by the Congress with its spokesperson Shakeel Ahmed saying it should be made in Parliament, not outside. He also said that the Sensex had recovered by the end of the day.

The BJP said an earlier announcement by the Securities and Exchange Board of India (SEBI) made on its website on Tuesday hinting at regulation of inflows of funds through the participatory note (PN) route had resulted in the crash, with the Sensex losing more than 1,500 points within minutes of start of trading. “This was followed by a late clarification by the Finance Minister,” a fact which “clearly exemplifies the complete mishandling of the situation,” BJP spokesperson Prakash Javadekar said. Dark hints were also thrown by the BJP about relatives of some important persons having made money as a result of the sharp fluctuations in the market.

The party criticised the Finance Minister for ‘causing volatility’ in the markets by his remarks. The BJP said it was true there had been demands about regulation of the funds flowing through the PN route as security agencies and others suspected various terror groups of using the markets to bring in money for their activities. While the BJP did not object to closer regulation of the PN route, it said, “The PN route should have been checked much earlier as money without any knowledge of the source [of the funds] is systematically being pumped in by this method for some time.”

The party spokesperson said 51 per cent of the assets under custody of all Foreign Institutional Investors (FFIs) totalling Rs. 3,53,484 crore had come in through the PN route. This, he said, was dangerous as the source of the funds was not known and not clearly established.

Mr. Javadekar admitted that even during the National Democratic Alliance government’s tenure a clear road map was laid out for phasing out the PN route.

The Lahiri Committee had also recommended this one year ago. The BJP’s charge was that the Government had not acted to regulate the PN route earlier.

“The PN route has … hot money, which may contain laundered Swiss money [from Swiss bank accounts], drug money and terror funds. The BJP had earlier demanded a complete ban or total regulation of such flows.”

When the ordinary investor has to furnish all details for entering the market, the PN route had become a shelter requiring no explanations. This was not a tenable situation, the BJP said.

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