Stock Market Investors Well-Informed on Risks and Rewards: Goyal

Union Commerce Minister Piyush Goyal stated on Friday that stock market investors are well aware of the risks and rewards when they invest. His remarks come amid rising concerns about people losing money in speculative short-term stock market bets. Goyal highlighted that investors have witnessed progress over the last decade.

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Official data indicates a significant increase in trading volumes, especially in derivatives and intra-day trading. However, nine out of ten futures and options bets fail, and seven out of ten intra-day bets result in losses for retail investors. This has led to regulatory measures aimed at discouraging speculative bets and promoting long-term investments.

India's Growth Story

Goyal questioned why some individuals are undermining India's growth story through social media videos. "There will be naysayers, there will be people who will distrust what you are saying. They will issue videos on social media scaring you and scaring investors not to invest in the India growth story. I don't know what their mindset or objective is, I don't know why they are trying to debunk the India growth story," he said.

The minister refrained from naming those posting such videos but hinted at their identities. He asked the audience if they understood who he was referring to and whether he needed to be more explicit.

Economic Foundations

Goyal asserted that the government has laid strong foundations for economic growth, predicting that India will become the third-largest economy within three years, up from the 10th place in 2014. He mentioned a recent meeting with the world's largest asset manager, who expressed confidence in India's economic stability despite currency depreciation or inflation concerns.

On inflation, Goyal questioned why the Reserve Bank of India (RBI) expects it to rise again after cooling down to around 3.5% in July, a five-year low. He credited Prime Minister Narendra Modi, Home Minister Amit Shah, and Finance Minister Nirmala Sitharaman for their efforts in ensuring fiscal and monetary measures to control inflation.

Export Performance

The Commerce Minister noted that exports are performing well, particularly in services. He attributed high imports to domestic companies' inability to produce enough goods and services to meet local demand.

Goyal also mentioned a 2013 RBI scheme that attracted USD 30 billion of foreign currency by offering higher interest rates. He clarified that such temporary measures should not be mistaken for signs of a strong economy.

Role of Chartered Accountants

A chartered accountant himself, Goyal estimated that the number of CAs would double to 10 lakhs within the next 6-8 years. He urged professionals to assist the government in drafting a concise and precise Income Tax Act.

In his address to chartered accountants, Goyal reiterated that stock market investments come with known risks and rewards. "Investments in the stock market are with eyes wide open; they know that it is fraught with risks and also know about the rewards," he said.

The minister also mentioned that Modi is currently in Kyiv as a peace messenger, advocating for dialogue and diplomacy.

The Commerce Minister emphasised that headline inflation would remain within RBI's target band of 4%, with a 2 percentage point leeway on either side.

Goyal concluded by highlighting India's progress over the past decade and questioning those who doubt it through social media videos. He stressed the importance of recognising India's growth story and supporting long-term investments.