India’s stock market struggles with government dominance and low participation
India's equity market participation is low, with less than 10% of the population involved. The government, owning over 10% of listed shares worth half a trillion USD, is a significant player in the stock market today. Prime Minister Narendra Modi has expressed that government ownership of businesses is not essential.
The Indian government has struggled to meet disinvestment targets, continuing to support many public sector companies. To boost market participation, the government must ensure a fair game in the stock market. This requires reducing its role as a market player to become a better umpire, eliminating conflicts of interest.
Currently, there's no public information about the Minister for Investment and Public Asset Management. Sebi, the market regulator, is appointed by the government, further highlighting the need for clear separation of roles in the stock market.
India aims to cultivate an equity culture, but government involvement in the stock market poses challenges. To achieve this, the government must guarantee fairness, reduce its market role, and ensure transparency in key appointments, such as the Minister for Investment and Public Asset Management.
