As the stock market spooked on Monday on the fear of the Centre taking steps to check the inflow of overseas investment through Participatory notes (P-Notes) on the recommendation of the SIT on blackmoney, Finance Minister Arun Jaitley tried to allay fears of investors by asserting the Government will not react in a “knee-jerk” manner.
Markets plummeted with Sensex crashing by 580 points to slip below the 28,000-mark amid fears of tightening of P-notes rules and the Sanghai composite index shedding almost 8.5 per cent.
Jaitley said the Government will take a considered view in the SIT recommendation for stronger measures to identify owners of Participatory Notes (P-Notes) to check black money.
“It is too early to say what view the Government would take. But it will certainly not take any such action in a knee-jerk reaction, particularly one which has any adverse impact on investment environment,” Jaitley told reporters.
Echoing similar views, Revenue Secretary Shaktikanta Das said there was no need to “panic” and the Finance Ministry will take a view on the SIT suggestions only after consultations with Sebi, RBI and other institutions.
“At the moment there is no need to panic. We will take views after consultation with stakeholders including Sebi, RBI and related institution... There is no need for markets to react in any particular manner,” he said.
The SIT had last week suggested to Sebi to put in place regulations that will help identify individuals holding P-Notes or offshore derivative instruments (ODIs), and take other steps required to curb black money and tax evasion through the stock market route.