Are we regulating risk or merely regulating market activity?

ENHANCED RBI COLLATERAL NORMS: IMPACT ON CAPITAL MARKETS

AS THE NARENDRA MODI

Government completes 12 years in office India's macro-economic indicators present a largely reassuring picture. The fiscal deficit and current account deficit remain manageable, GDP growth continues to outpace most major economies, unemployment has moderated, and inflation, despite pressures from global geopolitical tensions and elevated energy prices, remains broadly under control. The principal vulnerabilities lie in the rupee's depreciation and India's persistently high import bill.

Another area that deserves attention is foreign capital flows. Attracting sustained foreign investment requires more than favourable macro-economic conditions. Global investors allocate capital based on relative returns, and in the near term Indian equity markets have not always compared favorably with some international peers. If India wishes to attract larger and more durable flows, it must continue to strengthen the domestic investment climate, maintain a competitive tax regime, simplify compliance requirements, and nurture healthy financial intermediaries. Equally important is ensuring that regulation strikes the right balance between prudence and market development.

It is in this context that the government's recent tax reforms for foreign portfolio investors in government securities assume significance. The measures seek to create a more competitive environment for overseas investors while deepening India's sovereign bond market. Yet attracting capital requires a broader, ecosystem-wide approach. One question increasingly being asked by market participants is whether financial regulation is focused on managing risk or merely constraining activity. That debate has gained relevance with the Reserve Bank of India's revised framework governing credit facilities to capital market intermediaries, scheduled to come into effect on July 1.

The amendments are intended to strengthen prudential safeguards around bank financing linked to capital market activity. That objective is entirely legitimate; effective regulation must identify risks early and ensure that credit is deployed responsibly. The question, however, is whether the revised framework adequately reflects the actual risk profile of the entities and activities it seeks to regulate.

This issue is particularly relevant for stockbrokers, clearing members, proprietary trading firms, and other intermediaries that operate within exchange supervised and clearing corporation-backed frameworks. These entities rely on credit facilities and bank guarantees to meet exchange obligations, provide liquidity, facilitate price discovery, narrow bid-ask spreads and reduce trading for COSTS investors, including foreign portfolio investors.

 The discussion is often framed around proprietary trading, but the term covers a broad spectrum of activities. At one end are participants taking concentrated directional positions in anticipation of market movements. At the other are firms engaged in arbitrage, hedged strategies, liquidity provision and market making. Both may trade on their own account, yet their risk profiles and contributions to market efficiency differ substantially.

India's capital markets have navigated some of the most turbulent episodes in modern financial history, including the global financial crisis, sovereign debt stresses, the pandemic-induced market shock, and repeated bouts of volatility. Throughout these episodes, exchange-related credit facilities, including bank guarantees furnished by brokers and intermediaries to exchanges and clearing corporations, have generally exhibited limited instances of default relative to overall exposure. Outstanding exchange-related bank guarantees are estimated at over 1.2 lakh crore yet the segment has not demonstrated the kind of sustained credit stress typically associated with elevated lending risk.

The risk profile has also been strengthened by a series of regulatory reforms over recent years. These include upfront margin collection, peak margin reporting, daily segregation and upstreaming of client funds, restrictions on the use of client assets as collateral and intraday margin monitoring Together, these measures have significantly enhanced market discipline and reduced the potential for systemic stress.

Moreover, the entities affected by the revised framework operate within highly structured and continuously monitored environments. Transactions are subject to real-time margining, daily mark-to-market settlements, collateral requirements, and oversight by exchanges and clearing corporations. Risks are measured and managed throughout the trading cycle rather than assessed periodically. These safeguards do not eliminate risk, but they materially influence its nature and magnitude.

Banks, too, conduct independent credit assessments before extending facilities to market intermediaries, evaluating financial strength, governance standards, risk management systems, capital adequacy, and historical performance. The broader banking data provides additional context. According to RBI figures, gross nonperforming assets, 2.3% in industry and 2% in ratios, stood at 6.1% in agriculture services and 1.2% in personal loans during FY25. By comparison, NPAs associated with capital market intermediary exposures have historically remained negligible.

This is not an argument for special treatment. Rather, it is an argument that regulation should be calibrated to evidence. Financial regulation routinely differentiates between activities based on risk characteristics. There is merit in applying the same principle here. Market-linked activity is often viewed through the lens of volatility, leading to the assumption that market risk automatically translates into credit risk. In reality, the two are not always synonymous. The issue is not whether prudential safeguards should be strengthened. The RBI is right to ensure that bank credit is used responsibly. The issue is whether regulation can become more precise in distinguishing between different forms of market activity while recognizing that leverage and liquidity are essential components of well-functioning capital markets.

As the July 1 implementation date approaches, these questions deserve careful consideration. The strongest regulatory frameworks are those that align policy with evidence, encourage responsible risk-taking, and support market development without compromising financial stability. That principle should guide this debate as well.

Global investors allocate capital based on relative returns, and in the near term Indian equity markets have not always compared favorably with some international peers.

The risk profile has also been strengthened by a series of regulatory reforms over recent years

(The author is National Spokesperson, BJP)

 Indian Economy: Budget And Beyond

Written By : Gopal Krishna Agarwal,

With commitment and willpower to achieve our stated objectives, the budget will be a vision document to the goal of Viksit Bharat

Globally, there is a lot of interest around India right now. It is not surprising, given that India appears to be an island of calm amidst the geopolitical upheaval that is going on.

When countries in the world are unsure about their changing position and role in the emerging global order, India has hunkered down and focused on its economy.

With current financial year’s GDP growth projected to be above 7% and healthy growth expected to continue, India is poised to become the third largest economy of the world soon. It does not mean that there will not be challenges on the economic front.

I underline this because the current bump in GDP growth rate is a result of a number of initiatives by the Government—increased exemption limit for income tax, lowering of indirect tax under GST 2.0 reforms, successful inflation management which gave RBI a window to reduce policy rates. Thus, the low-hanging fruits for pushing up GDP growth have been plucked, and sustaining real GDP growth above 7 per cent in the coming years will require significant policy initiatives by the Government. PM Modi calling his commitment to express reform becomes vital in this context.

The upcoming annual budget is an important document and will outline India’s roadmap to Viksit Bharat beyond headlines. It is satisfying to note that the policymakers in the Government ecosystem know the challenges and acknowledge them with sincerity. We have already seen promising developments, like the notification of the labour laws, in the last few months. It shows that the Government will continue to work on the challenges that are holding back economic growth.

Nothing is more symptomatic of the failure of India’s economic planning than the abysmal share of the secondary sector in our GDP. There just cannot be equitable growth without the manufacturing sector taking off in a big way.

Though initiatives have been taken under the rubric of ease of doing business, production-linked incentives, etc., a lot more still needs to be done. Factor market reforms need to extend to land and capital. Land ownership and transfer needs digitisation fillip, and land acquisition and land use change needs to become easier. We have successfully implemented digital public infrastructure, but digitisation of land records is still a work in progress. Policy gaps crippling manufacturing units in the MSME sector will be addressed for it to become globally competitive and take full benefit of several FTAs that we have signed.

Our manufacturing is still capital intensive, in spite of an abundance of labour. Hopefully, implementation of the labour code will correct the balance, but still, uniformity in labour regulations across States is a must. The Central government will ensure that the objective of codification is not defeated by differences in State-level regulations, but States have to come on board. Custom Duty reduction and process simplification are on the cards, and ideas like quality control orders (QCO) are given up. At a time when the government is successfully negotiating free trade agreements (FTA) such as with the European Union, which is the eighth in line, it is equally important to ensure that we position our manufacturing sector to benefit from it.

With the continued government focus on fiscal consolidation and the private sector investment still to pick up in a big way, the government sure will continue spending on capital expenditure. The Economic Survey has pointed out that bringing disinvestment back on the agenda will have a reassuring effect on the economy; its suggestion to amend the definition of Government Company in the company law, bringing the requisite government’s shareholding to 26%, is welcome. It would not only provide resources for high public capex, it will also signal the government’s firm commitment to continued economic reforms and generate an additional source of revenue to the government.

The trickle-down effect of economic growth alone cannot bring equity of income, because of varying educational and health standards in the country, our focus should shift to a bottom-up approach, utilising India’s cultural diversity, particularly handicrafts, cottage industries and in areas like art, music, dance, food, festivals, etc. Skilling and establishing financial connect with artisans in rural areas will bring prosperity to remote villages. Monetisation and creation of value for the practitioners with e-commerce and digital transactions will see our country’s cultural economy as a new catalyst to propelling growth in our country. It is a vital intangible resource that remains largely untapped.

India is witnessing exemplary growth in Southern and Western States, and States in the North are also doing reasonably well. The Government’s extra attention to states and regions in the East—Bihar, Jharkhand, Chhattisgarh, Orissa, and Eastern Uttar Pradesh—will bring balanced geographical growth.

A plan for these States in the upcoming budget on the lines of ‘aspirational districts’ could be a good starting point. These states/regions offer cheap land and labour, proximity to the energy source of coal can help them grow as good manufacturing centres.

With commitment and willpower to achieve our stated objectives, the budget will be a Vision document to the goal of Viksit Bharat.

Gopal Krishna Agarwal is the National Spokesperson of BJP for economic affairs.

Current geopolitics on trade and tariff and India’s economic interest

Gopal Krishna Agarwal,

The recent churn in global trade and geopolitics has exposed the limits of sentiment-driven diplomacy and forced nations to reassess long-held assumptions about strategic partnerships

The last few months have upended not only global trade but also long-held beliefs in international relations. Despite being strategic partners and natural allies, we see that many countries' policies, particularly those of the US, are not conducive to India's global positioning and current stature. Though the Indo-US trade talks are back on track after hitting a rough patch, Indians should not be too surprised by any future shocks. The US has put restrictions on the H-1B visa and the withdrawal of the exemption to the Chabahar port in Iran, both of which disproportionately affect Indian interests. Our surprise at these developments reflects on our lack of perspective on geopolitics and geo-economics.

Global geopolitics is given. Every country is pursuing its national interests. An overlap of interests in one area does not mean that the first country will not pursue its interests in matters that might put it in an adversarial position with some of its partners. Pursuance of one's own national interest also involves actively undermining the economic, strategic and political interests of other countries.

India must first and foremost decide its national interests. It includes rapid economic growth, social stability, peace within its borders, and the maintenance of credible deterrence along its land borders in the north, east, and west. Our national interest also lies in maintaining strategic autonomy, for which we need to insulate ourselves from hostile actions by global powers in the domain of energy (oil and gas), semiconductors, rare earth materials, pharmaceuticals, defence platforms, etc. Some of these need to be achieved through the doctrine of aatmanirbharta, irrespective of the financial costs involved. For others, we need to cultivate our relations with other countries and strengthen multilateral platforms.

No doubt, the US have bruised Indian self-respect and ego, and there is a shared sense of betrayal among the citizens; however, the path of retaliation is not a prudent strategy. India has already done enough to show that global players would not dictate it on matters of its national interest. We do not depend on external security cover. We have continuously reduced our dependence on foreign sources in defence relations, especially in the purchase of offensive platforms that require constant support for operations and maintenance. Except for energy, all other areas of engagement are expected to remain unaffected.

America and European countries remain important to India. As a free, democratic, and secular society, India is a natural ally of the US and other G7 and G20 countries. Until we have a trade deal with the US, our FTAs with countries like Germany, the United Kingdom, New Zealand, Oman, the UAE, Australia, Latin America, and the Eurasian Economic Union are bound to benefit our economy. This is already evident in the increase in our exports, robust GDP growth, and IIP manufacturing-sector numbers.

But to take full benefit of FTA, our first focus should be on domestic reforms and strengthening our manufacturing sector, particularly the MSME segment. It was already a work in progress and a focus area for the government, but the trade imbroglio with the US has added urgency. It is an undeniable fact that the Indian manufacturing sector still needs to cover a lot of ground to be globally competitive. India could not fully take advantage of its earlier FTAs with countries such as Japan and South Korea because of this limitation. The recent Goods and Services Tax (GST) Next Gen 2.0 reforms and other important steps, such as deregulation and Labour Code notifications that reform factor markets, will ensure that our economy continues to withstand global shocks and move ahead as the fastest-growing large economy in the world.

India has always been a strong proponent of multilateralism and a rules-based international order. The current cold phase in global relations gives India the opportunity to focus its time and attention on protecting and promoting multilateral platforms and organisations. A world divided into small camps with competing bilateral relations is neither conducive to economic growth nor to global peace. Bilateral free trade agreements (FTAs) have become a rage, and we too are negotiating several FTAs, but we should not forget to protect the interests of the Global South, most of which would not be able to negotiate fair bilateral trade agreements with the Western block.

India is not beholden to any great power and will never act as a hired gun. This might come as a disappointment to some countries, but they must understand the psyche of the Indian state and modify their expectations accordingly. We might have some overlap with China right now, but given the ruthless pursuit of its own interests and its strategic culture and history, China might try to lull us into complacency and then give us a rude shock later.

A unique feature of hotly contested domestic politics in India was a near-consensus on international matters. With an irresponsible opposition that fails to draw a boundary between political and national interest, that aspect of consensus is, regrettably, missing right now. Domestic political compulsions in such cases may limit the options of the Government to take a strong stand on foreign affairs. Thankfully, Modi Government, in pursuance of India's national interest, is not constrained by petty domestic political considerations.

विकास का नया रास्ता: भारत के आर्थिक मॉडल में संस्कृति की एंट्री

गोपाल कृष्ण अग्रवाल ,

भारतीय परंपरा हमारे जीवन में अनुशासन और नैतिक जिम्मेदारी बनाए रखती है।  यह एक ऐसे संतुलित समाज की कल्पना करती है, जहां आध्यात्मिकता और आर्थिक समृद्धि एक साथ मौजूद हों और मानवता को उज्ज्वल व सामंजस्यपूर्ण भविष्य की ओर ले जाएं।

भारत की सांस्कृतिक संपदा की वास्तविक आर्थिक क्षमता को अभी तक पूरी तरह समझा नहीं गया है। भारत एक जीवंत संस्कृति है, जो देश की 140 करोड़ जनता के जीवन का हिस्सा है। यह किसी संग्रहालय में रखी जाने वाली वस्तु नहीं है, बल्कि इसे देश के हर क्षेत्र में लोगों की दैनिक गतिविधियों का हिस्सा बनाया जाना चाहिए।

 

इस सांस्कृतिक संपदा का अध्ययन करने और उसका सही दोहन करने के लिए एक व्यवस्थित कार्ययोजना की ज़रूरत है। सांस्कृतिक अर्थव्यवस्था को भारत के विकास मॉडल के रूप में आगे बढ़ाने के लिए समान विचारधारा वाले लोगों और संगठनों को साथ लाना समय की मांग है।

 

भारतीय परंपरा हमारे जीवन में अनुशासन और नैतिक जिम्मेदारी बनाए रखती है। यह एक ऐसे संतुलित समाज की कल्पना करती है, जहां आध्यात्मिकता और आर्थिक समृद्धि एक साथ मौजूद हों और मानवता को उज्ज्वल व सामंजस्यपूर्ण भविष्य की ओर ले जाएं।

           

सांस्कृतिक अर्थव्यवस्था की सबसे बड़ी विशेषता यह है कि यह किसी ‘ट्रिकल-डाउन थ्योरी’ पर आधारित नहीं है, जहां अमीरों को मिला लाभ धीरे-धीरे नीचे तक पहुंचे। इसके उलट, यह एक बॉटम-अप अप्रोच है, जिसमें देश के हर क्षेत्र के लोग बढ़ी हुई आर्थिक गतिविधियों के प्रत्यक्ष लाभार्थी बनते हैं।

 

साल 2019 में प्रयागराज कुंभ मेले के सफल आयोजन ने यह स्पष्ट किया कि हमारी सभ्यतागत संपदा में कितनी बड़ी आर्थिक संभावना छिपी हुई है। इस दिशा में और ठोस काम करना होगा। 

अगर हम वेनिस या दुनिया के अन्य प्रमुख स्थलों को देखें, तो वहां पहले आर्थिक गतिविधियां फली-फूलीं और फिर कला, संगीत, नृत्य, भोजन और त्योहारों में निवेश बढ़ा। कई देशों में आर्थिक सफलता ने सांस्कृतिक विस्तार का रास्ता खोला।

 

भारत का अनुभव इससे अलग है। यहां सांस्कृतिक धरोहर ने आर्थिक विकास को गति दी है। अयोध्या और कुंभ मेले जैसे उदाहरण बताते हैं कि संस्कृति किस तरह आर्थिक परिवर्तन का माध्यम बन सकती है। अयोध्या में आज बड़े पैमाने पर आर्थिक बदलाव दिखाई दे रहा है। अगर संस्कृति और अर्थव्यवस्था भारत में समन्वित तरीके से विकसित हों, तो देश आर्थिक रूप से मजबूत, सांस्कृतिक रूप से समृद्ध और समग्र रूप से विकसित बन सकता है। 

 

किसी भी अवधारणा को सफल बनाने के लिए उसके चारों ओर एक पारिस्थितिकी तंत्र बनाना ज़रूरी होता है। भारत में स्टार्टअप्स के सफल होने का कारण यही है कि सरकार ने कानूनों और कर लाभों में बदलाव कर उनके लिए एक मजबूत इकोसिस्टम तैयार किया। 

 

सांस्कृतिक अर्थव्यवस्था के लिए भी ऐसा ही पारिस्थितिकी तंत्र चाहिए, जिसमें नागरिकों के साथ-साथ सरकार की भूमिका अहम हो। वर्ल्ड इकोनॉमिक फोरम (WEF) की एक रिपोर्ट के अनुसार, 2024 में भारत यात्रा और पर्यटन के क्षेत्र में 30वें स्थान पर है। रिपोर्ट यह भी बताती है कि भारत प्राकृतिक संसाधनों में 6वें, सांस्कृतिक संसाधनों में 9वें और मूल्य प्रतिस्पर्धा में 18वें स्थान पर है। 

 

यह साफ दिखाता है कि भारत की सांस्कृतिक गतिविधियों का मूल्यांकन और मुद्रीकरण अभी ठीक से संरचित नहीं है।इसी वजह से कई त्योहारों, मंदिरों और सांस्कृतिक पहलों को वह वित्तीय सहयोग नहीं मिल पाता, जिसके वे हकदार हैं।मोदी सरकार का लक्ष्य इन गतिविधियों के लिए एक निष्पक्ष और संरचित मूल्यांकन प्रणाली तैयार करना है। 

 

एक अन्य रिपोर्ट बताती है कि सांस्कृतिक क्षेत्र में काम करने वाले वैश्विक संगठनों में से केवल 20 प्रतिशत ही खुद को आर्थिक रूप से आत्मनिर्भर मानते हैं।  यह आंकड़ा इस बात की ओर इशारा करता है कि सांस्कृतिक गतिविधियों को मजबूत आर्थिक आधार देने की ज़रूरत है। 

 

इन विचारों को नीतिगत सुझावों में बदलना ज़रूरी है। इसके लिए डेटा-आधारित निर्णय अहम हैं, क्योंकि ठोस डेटा और शोध के बिना चर्चाएं सिर्फ सैद्धांतिक रह जाती हैं। वास्तविक डेटा एकत्र करना, रुझानों का विश्लेषण करना और सांस्कृतिक आर्थिक विकास के लिए संरचित मॉडल बनाना ज़रूरी है। 

 

हालांकि, कई सरकारी योजनाएं मौजूद हैं, लेकिन उनकी जानकारी और पहुंच सीमित है। कलाकारों, सांस्कृतिक उद्यमियों और संस्थानों को इन योजनाओं से जोड़कर इस अंतर को पाटना होगा। इससे इन गतिविधियों का वित्तीय पोषण और बेहतर कार्यान्वयन संभव हो पाएगा। 

 

हमारे रोडमैप में सांस्कृतिक अर्थशास्त्र को शासन के पारिस्थितिकी तंत्र का हिस्सा बनाना शामिल है। इससे विभिन्न राज्यों की सांस्कृतिक क्षमता को बढ़ावा मिलेगा। सरकार का सार्थक हस्तक्षेप भारतीय कारीगरों को घरेलू और अंतरराष्ट्रीय बाज़ारों तक पहुंच दिला सकता है। 

 

भारतीय कारीगरों का संरक्षण और संवर्धन हमारे सुझावों का अहम पहलू है। यह विकेंद्रीकृत आर्थिक मॉडल भारत जैसे विविध और विशाल देश के लिए बेहद ज़रूरी है| इससे बड़े पैमाने पर श्रमिकों के पलायन को रोकने में भी मदद मिलेगी। सांस्कृतिक अर्थतंत्र मंदिरों के पुनरुद्धार के साथ-साथ लोक नृत्य, संगीत और स्थानीय रंगमंच को भी नई ऊर्जा देगा। 

 

आर्थिक विकास के लिए उत्प्रेरकों की ज़रूरत होती है और यह पारिस्थितिकी तंत्र विकसित भारत के लिए ऐसा ही उत्प्रेरक साबित हो सकता है। संस्कृति का सीधा संबंध भले ही यात्रा और पर्यटन से हो, लेकिन इसके ज़रिए आर्थिक विकास के और भी कई रास्ते खुलते हैं। भारत का सांस्कृतिक आर्थिक विकास मॉडल वैश्विक स्तर पर सामाजिक, सांस्कृतिक और आर्थिक विकास की एक महत्वपूर्ण केस स्टडी बन सकता है। 

 

प्रधानमंत्री मोदी का स्पष्ट विज़न है कि भारत की सांस्कृतिक विरासत हमारी अर्थव्यवस्था का एक महत्वपूर्ण आधार है।अयोध्या में राम मंदिर का निर्माण, काशी विश्वनाथ और उज्जैन महाकाल मंदिर कॉरिडोर, कुंभ मेले को नया स्वरूप देना और दुनिया भर में तमिल संस्कृति केंद्र स्थापित करना इसी विज़न की कड़ियां हैं। 

जी20 के आयोजन ने भी दुनिया के सामने भारत की विविध और जीवंत सांस्कृतिक विरासत को प्रभावशाली ढंग से प्रस्तुत किया। 

 

भारतीय संस्कृति हमारी सॉफ्ट पावर है, जैसा प्रभाव आयुर्वेद और योग के जरिए पहले ही दुनिया में दिख चुका है। अब यह सुनिश्चित करना होगा कि इन सांस्कृतिक गतिविधियों से होने वाला आर्थिक लाभ सीधे देश की जनता तक पहुंचे। 

 

प्रधानमंत्री का स्वदेशी का आह्वान दरअसल औपनिवेशिक मानसिकता से बाहर निकलने का आह्वान है। हज़ार साल की गुलामी के बाद भारत का सांस्कृतिक पुनर्जागरण हो रहा है। अगर हम अपनी कला और संस्कृति को जानें, उस पर गर्व करें और स्वदेशी अपनाएं, तो विकसित भारत के संकल्प को पूरा करने में निर्णायक योगदान दे सकते हैं। 

(गोपाल कृष्ण अग्रवाल भाजपा के राष्ट्रीय प्रवक्ता हैं। उनका एक्स हैंडल @gopalkagarwal है। ये उनके व्यक्तिगत विचार हैं।)

India’s rich culture can boost manufacturing sector. If we can value it

Gopal Krishna Agarwal,

India’s cultural content in the field of art, music, dance, food, festivals, and architecture can catalyse countries' services and manufacturing sectors, particularly MSME and cottage industries.

 

India’s unemployment challenge is symptomatic of the failure to establish itself as a modern manufacturing nation. Consequently, there is a great deal of emphasis by the Modi government to promote manufacturing in India.

                          

There is a near consensus that, following the deindustrialisation during colonial rule, the manufacturing sector should have been a major area of policy emphasis in India in the post-Independence era. Instead, policy prioritised capital goods, leaving the consumer goods industry to its fate. The dalliance with socialist ideals in the later years crippled factor market mobility even more and exacerbated the problems faced by the manufacturing sector.

 

The global development literature on newly independent countries in the 20th century shows that no economy sustained annual growth of 7-8 per cent per annum without relying on exports. These exports consisted of low-value, mass-produced, and undifferentiated products that did not involve much human skill beyond operating basic tools and machinery. South Korea, Taiwan, and Thailand were the pioneers of this model, and later China mastered it to perfection. This economic model delivered economic growth, jobs, and prosperity to these countries.

 

India is now trying hard to ride this. Exports are expected to address the unemployment problem and provide an additional engine of growth. The recent initiatives of the Modi Government have focused on factor market reforms, improvements in infrastructure, lower compliance and logistics costs, and a shift toward trust-based regulation to support the manufacturing sector.

 

Coupled with initiatives like the Production Linked Incentives (PLI) and Employment Linked Incentives (ELI), there is no doubt that manufacturing has become a major policy priority.  Next Gen GST 2.0 reforms and the notification of the long-pending labour codes underscore the government’s sense of urgency. India must focus on its manufacturing sector despite the ongoing de-globalisation trends and the abandonment of WTO mechanisms.

The era of handmade

The fickleness of global trade aside, India has another manufacturing subset to focus on. It historically excelled in handmade, intricate, high-value products involving exceptional skills. Such products were in great demand among affluent sections all over the world. Indian products made of cotton and silk, wood, metals and their alloys, enamel, ivory, etc., were status symbols, coveted for their uniqueness and snob value. The Roman aristocracy’s appetite for Indian luxury goods was so intense that Pliny the Elder, in the 1st century CE, lamented the steady drain of gold from Rome to India. 

In an era of mass commodification and machine-made goods, where human involvement is reducing with each passing day, human-made products will be most valued. They have stories to tell. With increasing domestic and global affluence, the demand for such products will increase exponentially. India has millions of artisans involved in making products that command awe and astonishment. Their fine craftsmanship is the result of a generational accumulation of knowledge and years of practice that culminate in mastery.

 

Regional centres of excellence, such as the Bidri work of Bidar (Karnataka), brassworks of Moradabad and woodcarvings of Saharanpur in Uttar Pradesh, Madhubani paintings of Bihar, iron craft of the Bastar region of Chhattisgarh, and the numerous textile specialties spread across the country, are only a few of the specialties that we possess. Most of these products have some kind of market linkage, but it is far below their potential market. The practitioners of these crafts face issues related to certifications, promotional marketing, finance, packaging, and distribution, etc.

 

A vibrant traditional arts and crafts sector ensures that people find livelihood in their native place and are not compelled to migrate in search of jobs. The government has taken a number of steps to make this sector robust. The private sector must also pitch in with its expertise and corporate social responsibility (CSR) funds.

 

The sustained campaign to get intellectual protection like the Geographical Indicator (GI) tag will ensure that the economic benefits flow to the original purveyors of the art form and not to some shrewd but marketing-savvy interloper. If we fail to make our handicrafts remunerative, we will lose such skills and the civilisational wealth associated with them forever. That would be an irreparable loss not only for India but for the entire humanity.

 

India’s cultural content in the field of art, music, dance, food, festivals, and architecture can catalyse countries’ services and manufacturing sectors, particularly MSME and cottage industries. Our focus on the cultural and creative economy will take development to the rural areas, helping with a bottom-up approach for economic growth. This will counter the concentration of wealth as an outcome of the current GDP-based growth model and its trickle-down approach.

 

Gopal Krishna Agarwal is the national Spokesperson of the BJP. He tweets @gopalkagarwal. Views are personal.

Trust & transparency: How India’s capital markets became a global benchmark

By Gopal Krishna Agarwal,

SEBI and India’s stock exchanges have laid the foundation of a fair, efficient, and technology –driven ecosystem that inspires confidence globally.

Financial markets are the backbone of capital formation — the vital bridge connecting savings to investments. Land, Labour, and capital are the three classical pillars of economic development.

 

India is abundantly endowed with land and labour but has historically faced a scarcity of capital. Despite a traditionally high savings rate, the challenge has often been channeling these savings into productive avenues. A well-regulated and transparent capital market provides precisely that channel transforming individual thrift into national strength.

 

Ø  India’s Capital Markets: Setting Global Benchmarks

 

Under the aegis of the Securities and Exchange Board of India (SEBI) and the Ministry of Finance, India’s stock exchanges have evolved into global benchmarks of efficiency and trust. Nearly 100 percent of market delivery today is in dematerialised form.  Investors enjoy complete online trading with real-time price discovery across geographies and full counterparty settlement guarantees.

 

India ranks 13th among 190 countries for minority shareholder protection a testament to its robust corporate governance framework.  Exchanges have built a sophisticated ecosystem of compliance and leveraged cutting-edge automation to enhance transparency and reliability. The result is a surge of global confidence and unprecedented participation from Foreign Institutional Investors (FIIs) and foreign Portfolio Investors (FPIs).

 

As of 31 December 2024, the total market capitalisation of NSE-listed companies stood at 439 lakh crore, with an average daily turnover of ₹1.1 lakh crore in the capital market and 2316 lakh crore in the derivatives market - figures that underscore both scale and resilience.

 

Ø  Markets Are Built on Trust, Not Just Capital

 

Markets are not built merely on flows of funds; they rest on the bedrock of trust. Every trade, every regulatory decision, and every investment reflects the investor's faith in a system that is fair, transparent, and resilient.

This trust is especially vital in India, where the capital market has become a central pillar of national growth - financing infrastructure, telecom, energy, healthcare, and innovation. Over decades, regulatory institutions have evolved steadily, ensuring that India's market ecosystem commands credibility even amid global turbulence.

Ø  The Fragility of Sentiment

 

However, market trust is not immune to external shocks. A single report, a sensational headline, or a speculative filing can trigger waves of volatility. Recent years have witnessed attempts by short-sellers and speculative entities to exploit this fragility - aiming not to uncover the truth but to profit from panic.

 

Such episodes pose two risks: one, the immediate erosion of investor sentiment; and two, the deeper, longer-term threat of undermining confidence in India's institutions. The greater danger lies in overreaction allowing isolated events to define perceptions of India's market integrity, despite a long record of resilience.

 

Ø  Hindenburg 2023: The First Shock

 

In January 2023, US-based Hindenburg Research released a report alleging irregularities in the Adani Group. The report led to a steep fall in Adani stocks, erasing billions in market value and sparking multiple Public Interest Litigations (PILs).

 

When the dust settled, however, a Supreme Court-appointed expert committee found no systemic lapses. SEBI's detailed investigation also revealed no violations of related-party transaction or listing regulations. Notably, Hindenburg itself admitted to taking short positions in the same securities a clear conflict of interest that called its motives into question.

 

Ø  Viceroy 2025: A Pattern Repeats

 

In July 2025, a similar episode unfolded. Viceroy Research, a relatively obscure foreign short-seller, accused Vedanta Ltd. of irregularities the company was proceeding with a major demerger. Vedanta immediately dismissed the report as a "malicious combination of selective misinformation and baseless allegations."

 

A PIL was again filed, but on 10 October 2025, the Supreme Court refused to entertain it. The Court questioned why entities outside India were so deeply concerned about Indian corporate affairs. The Solicitor General highlighted a broader pattern - foreign agencies releasing timed reports to influence Indian markets and trigger volatility.

 

Despite political noise and speculative commentary, investors remained composed. The absence of sustained panic reflected growing maturity and confidence in the regulatory system. The episode demonstrated that Indian investors are learning to distinguish between genuine governance concerns and manipulative short-selling strategies.

 

Ø  Institutional Maturity and Judicial Balance

 

India's institutional response has been measured and wise. The Supreme Court, in both instances, upheld SEBI's primacy as the capital market regulator, reinforcing the principle that due process cannot be hijacked by sensationalism.

 

PILs are not signs of weakness but of democratic openness. The judiciary's restraint and SEBI's professionalism have together sustained confidence in India's financial architecture.

 

Building Resilience Through Trust

 

The path forward lies not in overregulation which risks stifling tl market but in strengthening resilience through trust.

 

For companies, that means proactive disclosure, timely communication, rigorous audits, and unwavering adherence to corporate governance. For investors, it calls for patience, discernment, and faith in regulatory institutions that have repeatedly demonstrated their integrity.

 

Trust, after all, is the ultimate currency of financial markets. India's capital markets are emerging stronger from every test, proving that transparency and institutional strength are their greatest assets.

 

SEBI and India's stock exchanges have laid the foundation of a fair, efficient, and technology-driven ecosystem that inspires confidence globally. As India moves towards becoming the world's third-largest economy, its capital markets will remain not just a reflection of economic power but a measure of collective trust.

 

(The author is National Spokesperson, BJP; Views expressed are personal)

 Reforms without bombast: Modi govt streamlines processes

Gopal Krishna Agarwal,

 

Modi Government in the last 10 years has initiated several steps to streamline processes, repeal redundant laws and regulations and eliminate discretion.

 When, it comes to economic reforms, in our obsession to look for big-bang, news-worthy headlines we tend to miss out on seemingly smaller developments. Media and the chatterati look for hotly contested issues, where passions run high and the political economy of the country makes progress very challenging.

 

An unfortunate consequence of this bias is a lack of fair assessment of the many ways in which the Government is upending the entrenched system of governance. Political corruption at the highest levels was one of the most important issues in the run-up to the 2014 general elections.

 

With the Modi Government taking over the reins in 2014, that variant of corruption was eliminated. Laws and policies are no longer made in return for kickbacks. However, the harassment and corruption at lower-level causing difficulties to businesses and citizens is a different animal altogether.  Recognising the need for a comprehensive, multi-faceted approach to tackle this menace, Modi Government has initiated several measures.

 

Modi Government in the last 10 years has initiated several steps to streamline processes, repeal redundant laws and regulations and eliminate discretion. This has led to marked changes in the way citizens interact with the bureaucracy. The threat of fastening criminal charges on violations of laws, rules and regulations was a threat that facilitated easy extraction of money from businesses.

Minor violations have now been decriminalised by the government and violators can only be made to pay fines. The other area of reform is the repeal of obsolete and redundant laws and regulations. Modi government in last 11 years has repealed over 1500 laws and eliminated over 40,000 unnecessary compliances.

 

Government has tried to use technology and reduce subjective discretion of administration, like in the case of GST reforms making process of registration, filling of returns, assessment and refunds completely online and simplifying the whole process. Direct Benefit Transfers to the beneficiary accounts has removed leakages and corruption from the government welfare schemes.

Single window online permission for businesses through Udyog Mitra initiatives of active State governments is to bring efficiency and reduce bureaucratic interference. Even in case of income tax, where ordinary citizens might have to interact with the bureaucracy, the process has been made completely virtual with E-assessment.

 

While issuing notice under the Income Tax Act, the officer does not know who the notice/assessee is, and the latter does not need to meet any officer to offer explanation, the process is anonymous. There is significant development in the matters of income tax refunds and assessment, which has now been made time bound.

 

Another such development took place in the recent past. In the month of June 2025 Delhi Lieutenant Governor (LG) repealed licensing regulations under section 28(1) of the Delhi Police Act, 1978, for seven specific trades. These include hotels, motels, guest houses, restaurants and eateries, discotheques, swimming pools, video game parlours, amusement parks and auditoriums. Following this, Delhi Police on 28th June issued a gazette notification implementing the directions of the LG with immediate effect.

 

Indian bureaucracy has traditionally enjoyed much power and discretion over daily lives of citizens- be it in their personal space or in running government. This has manifested in arcane and overbearing rules and regulations and the impulse to control outcomes. This power also leads to rent seeking behaviour on part of the individuals in the bureaucratic set-up. It is also typical of any individual or institution that once power, privilege or discretion is enjoyed by it, it will fight tooth and nail to preserve and protect its turf. Delhi Police, despite all its professionalism, could not be assumed to have acted differently. Therefore, it goes to the credit of its political boss, the Home Minister for pushing through this reform.

 

All these efforts are in the right direction but still business community has certain grievances calling for harassment. At policy level lot of things have been achieved by the government, though there is space at the implementation level. People with background in business and finance with foot on the ground, in the implementation structure is sure to bring more efficiency in governance.

 

An economy with regulatory cholesterol, finds it difficult to compete with other dynamic economies in the international arena, regulatory compliances add to the cost of doing business. It is one of the major challenge for the manufacturing sector to be internationally competitive. Therefore, Modi Government had made deregulation a major focus.

 

It has set up a Deregulation Commission for the non-financial sector that will take a comprehensive view of all the regulations and come up with recommendations. As the name itself suggests, the focus will be on doing away with otiose regulations. A similar initiative for the financial sectors is also in the pipeline. NextGen GST reform and Jan Vishwas bill are sure to bring ease of doing business to the business community.

 

A series of such crucial reforms, minus the sound and fury associated with the big measures, is imparting resilience to our economy by making private enterprise more fruitful. The cumulative impact of these steps is much more significant than only big steps that any government might take. Modi Government has always believed that reform is a process and not an event and its working shows deep commitment to this belief. The most recent quarterly GDP growth of 7.8 per cent is a vindication of government’s philosophy on reforms.

 

Gopal Krishna Agarwal

National Spokesperson of BJP