Speaking to ET Now, Subramaniam said the key issue was not the holiday itself but the lack of advance communication, which left investors, brokers and institutions unable to plan effectively.
‘Problem was timing, not the holiday’
“The problem is that it was not announced well in advance. People could not plan for it,” Subramaniam said, adding that the reason for the closure did not appear to be of national importance such as a festival or parliamentary election. Sudden decisions, he noted, tend to throw operational plans “out of whack”.
However, he also cautioned that markets must be prepared for unplanned disruptions, whether due to political developments, national mourning, or other unforeseen events. “These things are out of control. Markets have to adjust,” he said.
Subramaniam pointed out that Indian markets already follow a holiday calendar different from global peers. “The US is closed on Thanksgiving but we are open. We are closed on Diwali when global markets are open. Markets do not need to be open 24/7 to remain efficient,” he said.
No impact on real economy
Addressing concerns about economic costs, Subramaniam said the impact of a single non-trading day is virtually zero. “This has nothing to do with the real economy. It is only a second-derivative impact on financial markets,” he said.
In fact, he noted that a pause in trading could even shield retail investors during periods of heavy foreign institutional investor (FII) selling. Any adjustments related to derivatives or expiry resets, he added, are market-related rather than economic events.
Voting priority vs market operations
Subramaniam said the broader issue needs to be viewed through the lens of democracy. “In India, facilitating voting is critical. Everything possible must be done to ensure people exercise their right to vote,” he said.
He argued that staggered shifts or partial working hours are impractical in a city like Mumbai, where commuting times are long and voters must return to their home constituencies. “Someone living in Virar or Kalyan cannot realistically vote and return to work within a few hours,” he said.
Beyond exchange employees, he highlighted that nearly 25,000 people working with stockbrokers would also be affected, making a full-day holiday more practical than partial arrangements.
Need for clarity and advance planning
Subramaniam said he supports the holiday itself but stressed that it should have been declared when election dates were announced, months in advance. “That clarity is what was missing. The sudden announcement is the real challenge,” he said.
He also flagged coordination issues within the financial system, pointing out that banks, exchanges and intermediaries do not operate under a single authority for such decisions. “If banks are shut and markets are open, or vice versa, that creates further complications,” he said.
While such disruptions are likely to recur, Subramaniam said a better balance is needed between respecting capital markets as engines of wealth creation and prioritising democratic processes. “This tension is not going to disappear, but better planning can reduce friction,” he said.