Finance Minister Nirmala Sitharaman’s Union Budget 2025 can become a panacea for the stock markets. The Finance Minister will present the Union Budget on February 1, 2025. This budget can prove to be a cure for the stock market crash. Experts believe that the government is understanding this. If the Finance Minister announces on February 1 to end securities transactions, bring fiscal deficit to 4.5 percent, and increase capital expenditure by 15-20 percent, then the stock markets may get a boost. The health of the stock markets is not good since October this year.
Interest in stock market will increase due to end of STT
Stock market experts say that the government had made major changes in the capital gains tax rules in July this year. After this, Securities Transaction Tax (STT) is no longer needed. finance minister Nirmala Sitharaman If on 1st February STT If the government announces its abolition then it may increase the interest of investors in the stock market. The cost of investing in shares increases due to STT. Abolition of STT will have a positive impact on market sentiment.
How much does STT cost now?
Currently, 0.1 percent STT is charged on purchasing delivery based stocks. The buyer of shares has to pay this tax. The seller of stock also has to pay STT of 0.1 percent. STT is also applicable on F&O trade. The option seller has to pay 0.0625 percent STT. This is charged on the premium of the option. 0.02 per cent STT is levied on the sale of futures. The seller of futures has to pay this tax. In this way, the cost of investing in shares increases due to STT.
Market eyes on fiscal deficit target
Stock markets keep a close eye on the government’s fiscal deficit target in the budget. If the Finance Minister announces a target of 4.5 percent for fiscal deficit on February 1, 2025, then it will provide a lot of relief to the stock markets. In the last few years, the government has increased focus on reducing the fiscal deficit. The government wants to bring the fiscal deficit to 4.5 percent of GDP. The government will announce this in the Union Budget 2025.
Positive impact of increasing capital expenditure target on the market
The government had set a target of Rs 11.11 lakh crore for capital expenditure in FY25. The pace of capital expenditure has been slow in the first half of this financial year. But, it is expected to increase in the second half. Experts say that if the government increases the capital expenditure target for FY26 by 15-20 percent, it will have a positive impact on the sentiment of the stock markets. There may be a rise in the market.
Many benefits of increasing capital expenditure
The announcement of reduction in income tax will also boost the stock market. The main reason for this is that due to reduction in taxes, people will save more money. Economists say that lack of increase in consumption has affected GDP growth. In the second quarter of this financial year, GDP growth has come down to 5.4 percent. To make India a developed country by 2047, at least 7-8 percent GDP growth is necessary.