The government could offer the market relief

As a long slide in Indian stock indices persists, the Centre cannot ignore the current situation. It should step up reforms and adopt measures to help the market gain allocative efficiency

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One are those simpler times when a finance minister of the country could tell Parliament, as Manmohan Singh had in 1992, that he does not lose sleep over stock markets. While those who invest in shares directly or via mutual funds are still relatively few—India has some 180 million demat accounts and a little over 40 million mutual fund folios, with a considerable overlap between the two—the number of Indians with indirect exposure to stock prices via retirement savings and insurance policies would be about 350 million. As something that touches the lives and welfare of a quarter of the population, particularly the relatively well-off and articulate, the stock market matters. No government can afford to be blasé about it. So, the decline in market indices since late September is a reality that the Centre should take into account for policy decisions. Now, it is neither possible nor desirable for the government to try guiding capital flows in or out of stocks, but it can still take action in support of the market. The best way, of course, would b