Strong Case for Exemption of LTCG

In a dynamic environment, the stock markets require additional attention from policymakers to continue generating wealth for citizens and the country

- VIJAY CHANDOK

THE INDIAN STOCK market has come a long way since the time a handful of brokers in the 1850s had gathered under a banyan tree in Mumbai to trade in shares. Today, it is amongst the largest and most dynamic globally. Over the years, the Indian markets have evolved to be amongst the most technologically advanced and operationally efficient. The regulator has many times acted proactively to make it a level playing field with special attention towards retail investors.

The health of the stock market is often taken as a barometer of the future health of the country. And on this, we aren't doing too badly compared to some of the other global markets. India is a shining example of corporate resilience with strong earnings growth likely in the next fiscal.

Millions of livelihoods are directly and indirectly dependent on the stock market. Right from the brokers and exchanges to banks and NBFCs... all are deeply intertwined, and it is in the best interests of all stakeholders that the markets remain competitive, transparent, fair and rule-based.

In a dynamic environment, the sector sometimes requires additional attention from policymakers to continue generating wealth for the citizens and the country.

To this, the industry has a couple of submissions, which if accepted, will aid in the sustainable and long-term growth of the markets.

With India's economy expected to reach around $30 trillion by 2047, the market cap (m-cap) of Indian equities could potentially be in the range of $40-50 trillion, compared to $3.5 trillion now, implying more than a 10x rise. The above assumes that India's m-cap to GDP ratio could potentially be above 1.2-1.3x by 2047 (the US economy's m-cap to GDP ratio has oscillated between 1.2x and 2x in the recent past with its current GDP of $25 trillion).