FM stands by market regulator

Dasgupta said more than half a billion dollars had been pumped into the market by Foreign Institutional Investors (FIIs) in just five days in August, and artificially created a ‘‘bubble’’ that could burst any day. He said the FIIs were injecting ‘‘hot money’’ into the market which could be withdrawn within minutes.

India needed long-term FDI and not ephemeral FII flows, he said, pointing out that while FIIs had pumped in around $520 million into the market, not even a fraction of that amount had come in as FDI.

The CPI trade unionist went on to accuse Sebi of not enforcing rules and the government of sleeping over the matter. With UPA Chairperson Sonia Gandhi intently following Dasgupta’s speech, Chidambaram decided to respond even though he was not called upon to do so by the Chair.

The FM said he did not accept the ‘‘alarmist views’’ expressed by Dasgupta and maintained that India had one of the best-regulated markets. He also disclosed that he had spoken to the Sebi chairman this morning, and there was nothing to worry about.

He said while ‘‘opinions may differ’’ on the question of FII inflows, ‘‘I reject the argument that the government or Sebi is sleeping over the matter.’’ Both were keeping a close watch on the market, he assured the House.