The financial capability, technical capability, and knowledge capability areamong the core of the self-reliance of any nation. The demographic dividend is the runway on which the technical capability and knowledge capability can rely to fly.
The shelf life of technology and knowledge applications is diminishing fast. It is the technical capability that has proved as an asset during the COVID-19 time and the financial inclusion mission. This is reflected in the acceptance of lesser lead time by the population i.e. the agility of the citizen and implementation planning of the union government. The financial capability is something that is still hazy.
The general public more or less today understands the narrative war going on to derail the nation’s march towards prosperity. We have been a successful nation of entrepreneurs in our glorious days. Today we aspire to match our same ranking in the global platform. Our opponents understand well that it is the financial nerve that is a weak link. This is reflected in the blind race for jobs as the best alternative for gainfully employed instead of small-level entrepreneurship. The charm for private jobs in general and government jobs in particular is the mindset that is changing, but still, it needs to change a lot. The reason for the job hunt is the sense of security.
The opponents picked this as an opportunity to attack us. Now and then they come up with a narrative to demoralize our financial system. The role of the foreign institutional investor in the stock market is well recognized. These FIIs are failing to fail our stock market with the magnitude they could have done earlier. They engage the toolkit to plant a sense of insecurity in our stock market. The success of many small capital Initial Public Offers (IPOs) in our stock market in the last few years is a testimonial that we need not bother about FIIs too much. We should not do anything to please them but rather move on our own. The fifteen crore demat accounts that engage about nine crore retail investors in the stock market is the strong pitch that we can leverage to counter the speculation and volatility created by opponents including FIIs.
The recent volatility in the stock market has been attempted by Hindenburg. The latest background of the story is the Real Estate Investment Trusts (REITs). The background of REIT is that it was first conceptualized in the year 2007 and the Securities and Exchange Board of India (SEBI) approved it in year 2013. However, the first REIT was listed in the year 2019. The GST, RERA, and REIT, all these were conceptualized by the UPA but were delayed because of reasons best known to them. The NDA government executed all three that are related directly or indirectly to real estate and the stock market. Recently the Hindenburg linked Blackstone, REIT, and Adani with SEBI chairperson.
The Blackstone is a private equity firm based out of New York City. It invested in the first REITs named Embassy Office Park in the year 2019 and earned huge profit by the year 2020. The Hindenburg’s latest report attempted to malign the REITs on this foundation.
The Hindenburg Research prerogatives to be an investment research firm, i.e. it does the research related to financial investments including the investments made in the stock market. The extrapolation of REITs is INVITs i.e. the Infrastructure Investment Trusts. There are many public and privately promoted INVITs listed in thedomestic stock exchange.
The first INVIT was the IRB INVIT Fund to was listed in the year 2016. Since 2019 there have been more than two dozen INVITs listed in the stock market. These are in the power sector like publicly owned Power Grid Infrastructure Investment Trust, and in operations and maintenance segments like Cube Highway Infrastructure Trust, other publicly and privately owned list of INVITs include National Highways Infra Trust, National Infrastructure Trust, IRB Infrastructure Trust, and INVITs are even in supply chain like Intelligent supply Chain Infrastructure Trust. Such trust existed earlier also but the convenience to trade in the stock market started gaining popularity in 2019 after the success of Embassy Office Park REIT.
This equity format of REITs and INVITs is providing an opportunity for the nation to not bother about the financials as a constraint in the path towards developing our infrastructure. The domestic investors responded with maturity and participated in the nation-building by investing in REITs and INVITs. This listing of INVITs has taken care of the financials for a public project. We are developing our infrastructure with our financial resources. To derail the project, our opponents would discourage our population from participating in REITs and INVITs. If REITs fail then the cascading effect of this failure will be on INVITs.
It is because of INVITs that union minister Nitin Gadkari Ji keeps announcing vocally that we have more than enough money for our infrastructure projects. The Hindenburg and enemies of the nation are attempting to attack it. We responded well and the relevance of such so-called research-based foreign reports won’t be able to discourage us. We are marching towards financial self-reliance well.
(Alok Singh has a doctorate in management from the Indian Institute of Management Indore and promoter of Transition Research Consultancy for Policy and Management.)
