The Hindu Business Line : Chidambaram briefed on market crash

IN his first full day in office, the Finance Minister, Mr P. Chidambaram, met the RBI Governor, Mr Y.V. Reddy, and the SEBI Chairman, Mr G.N. Bajpai, amidst speculation that on top of the agenda of the meetings was the stock market crash on May 17 and its causes. However, maintaining a tight lip on the deliberations, both regulators described their visit as `courtesy call'.

The first to call on the Finance Minister was the SEBI Chairman. Queried by newspersons whether he had submitted any report on the stock market carnage, Mr Bajpai said that ``we are still analysing the data and our findings will be reported to the Government.''

He also said that no specific timeframe had been set for submitting the report on the carnage, while describing as `premature' to conclude that there was manipulation by any market participant or a bear cartel. The SEBI Chairman reiterated that the exchanges were not facing any payment or settlement problems and "our markets are safe".

After his meeting with Mr Chidambaram, the Reserve Bank of India (RBI) Governor said that he briefed the Finance Minister on all aspects of the economy, including the outlook for inflation and interest rates.

``The Minister did ask about the price situation. I have assured him that in our assessment, the outlook for prices remains as we indicated in the monetary policy,'' Dr Reddy said after his meeting.

The Governor said that the Central Bank did not see any need for change in its May 18 monetary policy stance and inflation during the current fiscal is likely to remain at the projected 5 per cent level. He held that the current surge in international oil prices could not be treated as a `shock', as its impact has already been factored in the official calculations. Others who called upon the Finance Minister on Tuesday included Mr Anil Ambani, Vice-Chairman and Managing Director of Reliance Industries, and Mr Kumar Mangalam Birla, Chairman of the Aditya Birla group. According to Mr Birla, ``It was a courtesy call and I wanted to congratulate him.'' Asked about expectations from the new Government, Mr Birla told Business Line that he expected its policies to be `pro-investment'.

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