The ongoing decline in the stock market since October last year has disappointed investors. Market sentiment continues to remain weak. Market experts believe that if the government accepts the demands of stock investors in the Union Budget, then it can bring enthusiasm back to the market. Representatives of the stock markets have informed Finance Minister Nirmala Sitharaman about their demands.
Nifty has fallen by 3000 from all time high
Nifty 50 It has fallen by about 3000 points from its all-time high of September 2024. On September 26, 2024, Nifty was at 26216 points. On January 16, it closed at 23,311 points. In this way it has fallen 2,905 points from its all-time high. However, this has reduced the valuation of stock markets. For a long time, concerns were being raised about the increasing valuations of Indian markets. But, retail investors are afraid of increasing market decline.
Market will be happy if capital expenditure target is increased
Market experts say that if the government announces to increase the target of capital expenditure by 15-20 percent in the budget, then it will have a good impact on the stock market. The government had set a target of Rs 11.11 lakh crore for capital expenditure for FY25. But, the actual expenditure is estimated to be less than Rs 10 lakh crore in this financial year. Consumption will increase by increasing capital expenditure of the government. This will boost GDP growth.
Stock investors demanded reduction in STT
The government had announced to increase the securities transaction tax in the budget presented in July last year. Its objective was to curb the increasing interest of retail investors in Futures and Options (F&O). The increase in STT has had a direct impact on the trading volume. Market experts say that instead of increasing STT, the government needs to inform retail investors about the risks associated with F&O trading. The government’s earnings from STC are increasing, but it is having a negative impact on the stock market sentiments.
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Demand to reduce capital gains tax rate
The Finance Minister had changed the rules of capital gains in the Union Budget presented in July last year. He had increased the capital gains tax. Now, short term capital gains tax is levied on withdrawal of money from shares or equity schemes of mutual funds before 12 months. It has increased from 15 percent to 20 percent. Selling shares or equity mutual funds after 12 months is charged as long term capital gain. The government has increased its rate from 10 percent to 12.5 percent.
However, the government has exempted capital gains up to Rs 1.25 lakh in a financial year from tax. Earlier its limit was Rs 1 lakh. Tax experts say that the government should reduce capital gains tax. If she cannot reduce the tax, then the capital gains limit for tax exemption should be increased to Rs 1.5 lakh.