Kailashnath Adhikari conducts maiden Visionary Talk with BSE’s Ashish Kumar Chauhan

Automation of stock markets, business continuity processes and disaster recovery sites have ensured the stock markets continued to be operational even during the lockdown. In the first Visionary Talk series held by public policy platform Governance Now, Ashish Kumar Chauhan, MD and CEO, BSE, said that though stock exchanges are not part of essential services, just a week ahead of imposing the lockdown, the government had hinted it wanted to keep the exchanges open.

In a webinar conversation with Kailashnath Adhikari, MD, Governance Now, Chauhan said that stock markets needed to stay open because if assets are not traded their prices could go into a tailspin, especially when people want liquidity in a desperate situation.   

‘‘The unanticipated 70-day lockdown with WFH norms required having a computer with internet connectivity. Within few minutes of the PM’s announcement of the nationwide lockdown on March 23, I started getting calls and had to announce on Twitter that  we will keep the markets open and it has not stopped since,” said Chauhan.

“Settlements where exchanges have to connect with banks and branches across the country, operated liked clockwork. With brokers, banks, registrars, depositories connected together, the collaboration worked phenomenally well. Despite India being a poor per capita country it has adapted technology to the remotest places with cooperation of various state governments and settlements. Effectively, Indian stock markets continued to provide services of not only trading but also clearings, settlements and even raising funds. During the lockdown, India has raised more than Rs 3 lakh crore worth of bonds and equities using our platforms. The system has worked so well that has the world has noticed that India is a force to reckon with.

Responding to the question on India’s growth and recovery taking place post 2020, Chauhan said that recovery will depend on how fast the world gets the Covid vaccine and medicines. “With large part of the workforce engaged into farming and with a reasonably good monsoon predicted this year around October November, there will be money coming in the hands of people as the yield starts coming.”

He added that the government’s announcement of free ration for the poor till December will ensure that the social fabric continues unabated. “While it remains to be seen when the Covid menace ends, India has gone elastic in the long run with being Atmanirbhar.”

Chauhan said that like the e-commerce boom, the global financial crisis in 2008 and the present Covid pandemic the government is pumping more money into the economy, which increases asset prices but not consumption prices. China, Japan, Europe and the US are pumping tremendous amount of liquidity which is nearly 12 trillion dollars and  several times larger than what was implemented during  the 2008 global financial crisis.

On the smooth implementation of the government’s package of Rs 3 lakh crore to bring MSMEs back on track, Chauhan acknowledged that there are problems on ground implementation of government policies but added that automation of almost all banks has provided a huge amount of data to banks, regulators and the policy makers. “The response this time is much quicker and monitored at the highest level in the ministry of finance to ensure that money reaches the participants. The money transfer in Jan Dhan accounts took place at the stroke of a button.”

Responding to the question of the government suspending Sections 7, 9 and 10 of the IBC for six months for initiating insolvency proceedings on defaults arising on or after March 25, 2020, due to Covid and how it would address a default that may have occurred just a day prior i.e. on March 24 and impacted by Covid, Chauhan said that policy by nature is not a fine instrument, it is rather a blunt legal document. Such nuances are a matter of discussion and the policy could not be blamed  for such a nuance.”