Stock markets must raise capital for farm, infra: PM

Contribute to nation through taxes

Highlighting and broadbasing the role of financial markets, Prime Minister Narendra Modi on Saturday said that it must be able to provide benefits to the largest section of our society including farmers and contribute extensively to infrastructure development.

“The true measure of success is the impact in villages, not the impact in Dalal Street or Lutyens’ Delhi. By that yardstick, we have a long way to go. Our stock markets need to raise capital in innovative ways for projects in agriculture,”  Modi said at the inauguration of the new campus of National Institute of Securities Markets (NISM) at Patalganga in Raigad district here, located nearly 70 km away from Mumbai.

Commodity markets
“Our commodity markets must become useful to our farmers, not just avenues for speculation. People say that derivatives can be used by farmers for reducing their risks. But in practice, hardly any farmer uses derivatives. That is the fact. Unless and until we make the commodity markets directly useful to farmers, they are just a costly ornament in our economy, not a useful tool,” he said.

Asking the market regulator to be vigilant, Modi said: “Those who profit from financial markets must make a fair contribution to nation-building through taxes.”
“For various reasons, the contribution of tax from those who make money on the markets has been low. To some extent, it may be due to illegal activities and fraud. To stop this, Sebi has to be extremely vigilant.”

Speaking on the issue of infrastructure development, the Prime Minister further said our markets should show that they are able to successfully raise capital for projects benefiting the vast majority of our population.

“In particular, I am referring to infrastructure. Today, most of our infrastructure projects are financed by the government or through banks. The use of capital markets for financing infrastructure is rare,” he said.

Varsity status
Market regulator Sebi chairman UK Sinha has said it will apply for a private university status for the National Institute of Securities Markets (NISM), which is an initiative to create a cadre of trained market professionals.

The proposal can be taken up by the state (Maharashtra) government in the budget session of the assembly, he said.