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ANMI seeks govt help for boosting trade volume in bourses

ANMI seeks govt help for boosting trade volume in bourses
PTI
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First Published: Thu, Oct 30 2008. 05 08 PM IST
Updated: Thu, Oct 30 2008. 05 08 PM IST
New Delhi: To encourage trading volume in the sagging stock markets, the government should take some initiatives, including reduction of transaction cost, the Association of National Exchanges Members of India (ANMI) said.
“In a falling market the trading volume on the domestic bourses are going down. The government should look at making the transactions attractive on the bourses by levying a uniform stamp duty,” ANMI President Bijay Murmuria said.
Currently, states charge different stamp duties on the transaction of stock market.
In a presentation made to the Finance Minister, the association demanded that the government should also look at reducing the Securities Transaction Tax (STT) by nearly two-third.
Earlier this year, the government had levied STT at the rate of 0.017% of the option premium, which was to be paid by the seller.
“We expect the Ministry to cut the STT to the minimum possible level such that it could act as a breather to the cash strapped system. A cut of over 60% would help investors to mobilise funds better for the transaction,” Murmuria added.
Besides, the association has put forward the necessity of setting up of a Sovereign Wealth Fund (SWF) to pull up the plunging stock market.
The SWFs are government-owned investment vehicles which have acquired significance in the recent times due to their proliferation and size.
As the country’s forex reserve stands at around $250 billion, the government should think of launching the fund now to mobilise funds in the domestic market, Murmuria said.
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First Published: Thu, Oct 30 2008. 05 08 PM IST