Three ways Budget 2024 can put more money in aam aadmi's pocket
NEW DELHI : Citizens always eagerly wait for the budget in the hope of getting more tax benefits. While the clamour for tax deductions grows, one aspect that is worrisome is the retail participation in high-risk investments like derivatives, intraday trading and high-fixed-return schemes. Driven by the stupendous performance and high taxation on regulated schemes, investors across age groups are investing in instruments that could carry much higher risk than they understand or can accept.
Data from the National Stock Exchange of India Ltd (NSE) shows that 40% of the NSE’s 95 million registered investors are Gen Zs as of May 2024, compared to 22% in 2018-19. Further, premium turnover on index options has grown 426% in the last three years, compared to 30% growth in the cash turnover market. High-fixed-return schemes like peer-to-peer (P2P) lending and low-rated bonds have traction among those looking for a regular return.
Even unregulated schemes like managed farmlands, renewable asset leasing, gold savings schemes, invoice discounting, fractional property etc. are finding favour with ordinary investors as they promise high returns. Investors are simply unaware of these schemes' structures or how they work.
They still pour in money as they do not know how to weigh the risks with returns. While regulators are making huge efforts to caution investors against dealing with unregulated entities, a few tax nudges can go a long way in getting investors to move in the right direction. This is even more essential now, as investor memory is short and most of the new investors have only seen rising markets.
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