Finance Minister adhering to fiscal discipline is very commendable, says Ashishkumar Chauhan, MD & CEO, BSE. In an interview with ETMarkets.com, he was optimistic that the FM will steer the economy to a robust growth trajectory. He hopes the market regulator Sebi will be able to take a decision on how to basically make the benchmark indices more representative of the market sentiment going forward, rather than being polarized. Edited excerpts:Was it a lacklustre budget, was it a disappointing budget, was it an inline budget? How would you classify it?
It is basically a Budget of a different style. It is basically trying to do three things; a), it is trying to give you a larger picture of what requires to be done. b), it is trying to see where the bottlenecks are and get them removed; c)what India needs to do in the next 5-10-20 years. These three things they are trying to cover in this Budget, in my opinion. It is not the budget which we are used to seeing in terms of the tax rate here and there.
They have not tinkered much with taxes. One could see in the Economic Survey that the private sector investment had failed to take off. For me, the corollary was to actually kick start the economy with public sector investment and that is what they are trying to do with the housing and waterways and the ports and everything. They are basically ensuring that the entire economy kick starts with more investments coming from the government side, which will improve the consumption. This is basically the one side of that story. The other side of the story is that the bottlenecks which we are facing in terms of ease of doing business, NBFC crisis and so on.
The FM has adhered to fiscal discipline, contrary to expectations. Your thoughts?
It is a very commendable thing because expenditure can run away when you want to kick-start the economy. Even NDA-1 under Mr Modi was very disciplined with bank balance sheet clean up and many other things including fiscal and other targets. That is continuing and it is very heartening to see that we are running a government with certain basic disciplines which any government should have.
Do you think the FM is on track in bringing the economy back to the strong growth trajectory here?
It should because of the way it works in creating confidence in the longevity of the government. The downturn happened within a very short period of two months — April-May. Before that, it was doing sort of okay and to some extent it was due to election. The way we run our elections, all policy decisions stop completely and that created a little bit of a logjam. Now that the new budget has come, the government has come in with the one larger mandate. The basic stuff they are doing includes providing water or natural gas to every household, focussing on roads, rural roads and so on. All this will finally ensure that the growth will be on a more sustainable basis going forward.
The government directed Sebi to build an exchange for social enterprise. What are the implications of this directive?
That is an interesting aspect of this budget. I do not know how finally it will work out but they would get even cooperatives which are working with social objectives in mind to list on exchanges.
Will it be a separate exchange or through the existing exchanges?
It could be in the same exchange with a separate segment like we have for SMEs and start ups and all. It remains to be seen. Around five years back, BSE had started new exchange called Samman for CSR activities. In a sense, BSE is pretty much tuned to thinking about how do we get different types of businesses on to the public markets. It is a very interesting and innovative suggestion.
Defaults, liquidity crisis including the entire NBFC crisis have hit investor sentiment in direct market as well as through mutual funds. What are your thoughts there?
The way you can look at it, the crisis is largely confined to a few NBFCs and HFCs, one or two large ones like IL&FS and DHFL. Many of the NBFCs have done well and so it is an issue very specific to a few companies although the impact could be bigger.
With the market activity confined to a selection of stocks, cash volumes have significantly shrunk of late. Could BSE take a hit on the top line?
Over a period BSE has broad based its income to many sources including in IPOs, mutual funds, bond distribution. BSE is now the largest bond distributor of India, the largest mutual fund distributor of India and also IPO distributor of India.
BSE is now slowly getting into other areas and we have created multiple sources of income and, of course, the bottom line and top line both may get affected to some extent in case the volumes go down further. We think that because of interoperability and other areas coming in, we may actually see an upside going forward in commodities, in equity derivatives and equities. In the currency segment too, BSE has become very large. Overall, we do not see that type of large dip but somewhere on the line, the newer areas which we have developed will start kicking in at some point of time.
Roughly how much do cash transaction contribute to the revenue of BSE?
Today the listing fees is the largest contributor of BSE. Today the mutual fund distribution is third and the transaction charges coming out of the trading volume is the second biggest contributor. .Broadly the mutual fund distribution was not there till two years back in terms of the revenue. So, it is a growing segment. Last year, it was Rs 30 crore.
Roughly what would be the percenRead More – Source
[contf] [contfnew] 
ET Markets
[contfnewc] [contfnewc]
