NSE Executive Advocates for Tax Reforms in Upcoming Budget to Stimulate Market Activity
Sriram Krishnan, the Chief Business Development Officer at the National Stock Exchange (NSE), has publicly urged the government to implement significant tax reforms in the forthcoming budget. His primary recommendations focus on reducing the Securities Transaction Tax (STT) and providing relief on Long-Term Capital Gains (LTCG) tax, aiming to enhance market liquidity and attract more investors.
Key Proposals for Market Enhancement
In a detailed statement, Krishnan emphasized that these tax adjustments are crucial for fostering a more robust and dynamic financial environment. The Securities Transaction Tax, currently levied on the purchase and sale of securities, is seen as a barrier to high-frequency trading and overall market participation. By lowering this tax, the NSE official believes it could lead to increased transaction volumes and improved market depth.
Additionally, he highlighted the need for relief in Long-Term Capital Gains tax, which applies to profits from investments held for over a year. Krishnan argued that easing this tax burden would encourage long-term investment strategies, thereby stabilizing the market and promoting sustainable growth. He pointed out that such measures could make Indian markets more competitive globally, attracting both domestic and foreign investors.
Potential Impacts on Investor Sentiment and Economic Growth
The call for these reforms comes at a time when the Indian stock market is navigating various economic challenges. Krishnan's suggestions are expected to resonate with market participants who have long sought tax incentives to boost their returns. A reduction in STT could particularly benefit retail investors and traders, making it more cost-effective to engage in market activities.
Moreover, by addressing LTCG tax concerns, the government could incentivize wealth creation and capital formation, which are essential for economic expansion. Krishnan's advocacy underscores the NSE's commitment to advocating for policies that support market efficiency and investor confidence. As budget discussions intensify, stakeholders will be closely watching for any announcements that align with these recommendations.
Overall, Sriram Krishnan's proposals aim to create a more favorable tax regime that could drive higher market participation and contribute to the broader economic objectives of growth and stability.
