It is now openly acknowledged that the recommendations of the Bimal Jalan Committee are biased in favour of the NSE; so, here’s how India’s monopoly stock exchange is expected to operate

A rattled Bimal Jalan has reacted to the criticism about his committee’s retrograde suggestions by pointing out that these could surely be revisited after five years. Since it is now openly acknowledged that the recommendations are totally biased in favour of the NSE, here is the lovely scenario in which India’s monopoly stock exchange would operate. NSE would:

• Face no competition.

• Continue to regulate brokers, but ignore transgressions by companies that openly flout disclosure rules in the listing agreement.

• Not be accountable to central vigilance or accounts committees, or under the Right to Information Act, but only to SEBI, which it has managed very well.  

• Have no pressure to perform, because profits will be capped—linked to return on RBI bonds, but not its high transaction charges.

• Not have an auditor of international repute, so there will be no questions on how it is spending on advertising, conferences, selective support to NGOs, media and powerful think tanks (ask Niira Radia how this works).

• Continue to pay salaries of the top brass on par with those of Goldman Sachs not the RBI or SEBI or other ‘utilities’.

• These pay-cheques will be ratified by an audit committee, which again need not be accountable to shareholders. Today, NSE’s managing director draws a gross annual compensation of Rs6.7 crore, his deputy, Chitra Ramakrishna, draws Rs4.5 crore and another director draws Rs2 crore. Their travel and other perks are on par with the best in the world. This happy situation will continue for the next five years! — Sucheta Dalal