Representative image showing Rs 500 notes and a calculator.
Credit: iStock Photo
Finance Minister Nirmala Sitharaman will present the 8th consecutive Union Budget on February 1, 2025. Reports suggest that the government is mulling over cutting income tax for those who are earning up to Rs 15 lakh a year in February's budget, in turn providing relief to the middle class.
The financial sector have pinned high hopes on the Union Budget FY 2025-26 documents and are keeping their fingers crossed regarding their expectations from the government's most important financial document of the year.
Restore full functionality of public Markets in the Budget 2025
"If India is willing to become truly ‘Viksit Bharat’ by 2047 and Developed Economy besides great Defence capabilities, it should develop the other great characteristics of developed economies like fully functional and efficient public markets as well as free currency. As far as public markets are concerned, India had a great going fully functional market on all fronts, a couple of years ago. There was great liquidity and on that basis our market use to enjoy the premium vis-à-vis other emerging markets.
Having said that, the steps taken in past two years, in the budget and outside it, on taxation front and on regulatory front have resulted in India’s premium taking a hit compared to other emerging markets. It has also impacted the market liquidity. For example, the Regulatory action have completely destroyed the Currency Derivative market in India, which has dipped to Rs 5,000 crore daily turnover from the Rs 40,000 crore in daily turnover earlier.
In addition to this, series of Regulatory action on the Equity Derivatives segment of the Indian capital market plus hiking the Securities Transaction Tax (STT) across the board has considerably reduced the liquidity in the market by 30-40 percent as compared to earlier period when the rates were not tinkered.
In this backdrop, this time the union budget should make an attempt to restore these two things; the currency derivatives markets should be opened up as this is critical for the Indian economy to become a Developed Economy.
To maintain the liquidity in the capital market, the government should rationalise the STT rates on futures, options and other instruments. It may probably result in loss of revenue for the government to some extent, but what it will be more than compensated by the new inflows that will come in by way of increased liquidity and by way of increased participation," Jimeet Modi, founder & CEO at SAMCO.
Union Budget 2025 | Nirmala Sitharaman, who continues to be Finance Minister, will present her record 8th Union Budget this time. While inflation has burnt a hole in the pockets of 'aam janata', reports suggest there might be a tax relief for those making up to Rs 15 lakh per year. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.