Unlike retail investors, Union Ministers appear to have faith in the stock market.
Of the 77 Union Ministers, 39 have exposure in the equity market either on their own or through family members, according to disclosures made by them, and available on the PMO's Web site. And not for them mutual funds or index heavyweights or even PSU stocks. Only a few own SBI, Reliance Industries and Infosys. Neither the Prime Minister , Dr Manmohan Singh, nor the Finance Minister, Mr Pranab Mukherjee, hold shares of any listed company.
Even Mr P. Chidambaram, Home Minister, who has also served as a Finance Minister, has only limited exposure. While investments by Mr Jyotiraditya Scindia, Minister of State for Commerce and Industry, and his family members in listed securities could not be ascertained from the disclosures, their combined exposure — stocks, debentures, mutual funds and bonds — topped the list at Rs 21.65 crore.
However, it is Mr Kamal Nath, Minister of Urban Development, along with his family members, who leads the pack in Dalal Street investments.
They owned listed shares worth about Rs 1.8 crore, as at the end of March 2011. But their holdings had come down drastically from the Rs 3.23 crore they had at the end of March 2010.
While Mr Kamal Nath did not disclose his and his family's holdings in his latest filing, he did do so last year.
Mr Sharad Pawar, Agriculture Minister, along with family members, maintains a portfolio worth Rs 41.96 lakh. His NCP colleague, Mr Praful Patel, is also an avid investor with Rs 81.03 lakh worth investments, though some of their picks are dud stocks.
The most favourable sector is fertiliser and power.
Stock picker
Are Ministers raking in the money on their equity investments? Not really. The combined portfolio performance has not been too great.
The average return by all the portfolios dropped 23 per cent during April 1 to September 14.
As against this, the BSE Sensex and the NSE's S&P Nifty fell 12 per cent and 13.9 per cent, respectively, and the BSE-500 tumbled 11 per cent.
The best stock picker is Mr Bharatsinh Solanki, Union Minister of State, Railways. His single holding of Sandesh gave a return of 3 per cent.
Conflict of interest?
Can the Council of Ministers hold stake in listed companies? According to a legal expert in Chennai, while it may be ‘legally right' for Ministers to hold shares of any company, it is up to the individual to ‘decide about his/her ethical strength'.
Prof. Trilochan Sastry of the Association for Democratic Reforms, a non-governmental organisation that is working on its own list of politicians' assets, said: “While conflict of interest of ministers in Western countries has been governed by specific statutes setting out a detailed Code of Conduct, there is a significant gap in India.”
Though there is a ‘Code of Conduct for Ministers' issued by the Cabinet Secretariat, it has no binding effect.
“It only requires a Minister to divest himself from the conduct and management of any business,” Prof Sastry said. India should have clear guidelines on ministers' holding, he added.