It is a struggle to invest money in short-term now, says Madhu Kela; points to best way to regulate F&O market
Market veteran Madhu Kela feels that the one engine of the economy of India doing well is the stock market. It is aiding a lot of capital formation. There has never been a healthier situation for the government. Today, if the government wants to raise even Rs 1 lakh crore, they have to only sell 2-3% of the PSUs and that can give them fiscal space of maybe 0.3-0.4%. There are lots of levers. Why will they want to kill the market? The taxation is not low. When long-term capital gains or short-term capital gains tax is combined with dividend distribution, buyback taxation, STT, and income tax, it is not low and there is a marginal tax on F&O already.
The most important point in the mind of the market right now is in the Budget tomorrow, especially in the backdrop of so much commentary coming in that regulator is saying mutual funds are taking away the bulk of deposits from the banking. The regulator, SEBI, is sounding worried about rising speculation on the F&O side. The market is expecting some move in the Budget to curb that. Is it justified to expect some move?
Madhu Kela: Not a question I would have loved to start with.
