Retail investors have put their faith in the Indian stock market and they are protecting it from volatility due to the fund flows of foreign investors, finance minister Nirmala Sitharaman said.
Inflows from foreign portfolio investors and foreign institutional investors depend on interest rates, and they can be tempted by interest rates and prospects elsewhere, she said in the Lok Sabha on Monday. The test was whether foreign direct investment (FDI) inflows continue even during instances such as the covid pandemic, as this indicates if the money coming in is staying invested in this country and is creating jobs, Sitharaman said.
“With fairness and objectivity, if the inflow of FDI remains unabated and India is the highest receiver of FDI since before covid and it continues significantly even during covid and subsequently also, that indicates that the money coming in is staying invested in this country, thereby creating jobs and prospects for us, and not FIIs and FPIs,” the minister said. FIIs and FPIs may come and go but Indian retail investors have proven that any shock that may come because of these flows is now taken care of because of the shock-absorbing capacity that retail investors have brought to the market, Sitharaman said. “I think we as a House should stand up and appreciate the Indian retail investor who has invested a lot confidence in the stock market today in India,” the minister said.
Sitharaman informed the Lok Sabha in a written reply that the GST Council has not recommended reducing the rate of 18% on health insurance. Sitharaman’s clarification on Monday was in reply to a question on keeping the rate as high as luxury products even when health insurance cost has gone up during the pandemic.
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