NSE CEO: Budget's STT, STCG Changes Minor, No Market Impact

Mumbai, Jul 23 (PTI) Largest equity bourse NSE's Chief Executive Officer and Managing Director Ashish Chauhan on Tuesday termed the Budget's moves on securities transaction tax and short term capital gains tax as "minor changes" which will not impact markets much.

On the correction in markets right after these announcements by Union Finance Minister Nirmala Sitharaman in her budget speech, Chauhan said the sell-off is a result of investors not understanding the implications of the moves.

Speaking to PTI, Chauhan said the market was expecting larger moves in the Securities Transaction Tax (STT) and Short Term Capital Gains Tax (STCG) front. He described these moves as "baby steps" towards transitioning to a regime where all the incomes of a person are taxed but also welcomed it for ensuring that capital formation continues in the economy.

To a question on whether we should expect more changes on the F&O (Futures and Options) front given the growing unease on the subject among policymakers, Chauhan said the focus now shifts to the regulators.

"Naturally, the other actions will be on the regulators' front and that remains to be seen," he said.

Chauhan also said that the increased taxation on STT and the STCG is an outcome of the criticism around derivative volumes.

The Budget proposals on buybacks take India at par with other markets, Chauhan said, stressing that this is a fair framework.

Chauhan also welcomed the other proposals in the Budget, including the move to reduce the fiscal deficit to 4.9 per cent and sticking to the Rs 11 lakh crore infrastructure investment.

He said the overall stress of the Budget seems to be on the job creation front as seen from the moves on employment generation.

To a question on the overhang of populism, as seen in the pronouncements on Bihar and Andhra Pradesh, Chauhan said broadly, the government's tendency is not to succumb to populism.