"Each player must
accept the cards life deals him or her: but once they are in hand, he or she
alone must decide how to play the cards in order to win the game."
—Voltaire (French,
1694-1778)
Word for the day
Celerity (n)
Swiftness; speed.
Malice towards none
What is a noble profession
in the country today - I mean actually
in practice?
First random thought this morning
A large number of people in the state of Haryana held violent protests,
disturbed public life, blocked highways & railways, damaged public
property, attacked police, blocked water supply, caused extreme inconvenience
to the other citizens of this country. The government promises them reward in
the form of reservation in government jobs.
A large group of people congregates at Golden Temple every year to
commemorate the "martyrdom" of the killers of the prime minister of
India. Ministers participate in the event and the state government extends
police protection to the event.
A small group of students allegedly shouted anti-India slogans in
a peaceful protest within the confines of a university in Delhi. Their leader
is arrested on the charge of sedition.
An even smaller group of students in Hyderabad allegedly protested
hanging of a terrorist, their leader was harassed to the extent that he ended
his life.
Please rewind the tape - I want to hear again what Mrs. Amir Khan
had said.
Why LTCG be exempt from tax?
On February 28, 2015 Shri Arun Jaitely presented his first full
budget amidst great expectations. The market which was already on roll for past
many months, scaled new high within three trading sessions after presentation
of the budget. However, since then it has been a rather disappointing journey
downhill.
This year heading into the budget presentations, the markets are
badly beaten, extremely jittery and expecting little from FM. Save some minor
tax concessions here and there, the market is mostly praying for a status quo.
Given the constraints like (a) the substantial pay commission and
OROP payments already overdue; (b) disinvestment targets already scaled down
due to poor market conditions; (c) commitment to implement food security law in
FY17; (d) RBI Governor's and global rating agencies' strong urge to not
compromise on fiscal discipline; (e) lower nominal economic growth leading to
muted tax revenue growth; (f) political urgency to provide for social spending
in view of the key state elections due in FY17 (TN, Kerala, WB, UP and Punjab)
- expecting any radical proposals from FM in the budget seems unrealistic to
me.
I believe, the market fully understand the dilemma of the finance
minister and hence does not expect him to dole out any goodies from his hat.
Save for the customary pre-budget memorandums by the trade and industry
representatives, I do not see any pressure on FM from the market side.
To the contrary, to keep the spirit of its participants alive, the
market has itself conjured up some events - not happening of which will make
people relieved; return of long term capital gain tax on listed equities being
the most prominent one.
Having observed the working of the finance ministry closely in
past 21months, I am reasonably assured that both the finance minister are
exceedingly sensitive to the financial markets. At this juncture, I do not
expect them to do anything that will trigger a sell-off in the market.
Having said that, I think that exemption to the listed equities
from LTCG (provided STT has been paid on the sell trade) is an anomaly that
would need to be corrected at some point in time.
In my view, the activity of buying and selling equity shares in
secondary market per se does not provide any risk capital to the
underlying businesses. It just changes the beneficial owner of the business. I
do not understand therefore why should someone who is actually transferring his
risk, be rewarded with lower (or no) taxes?
I do not support the argument that holding a listed stock for more
than one year in any way helps the economy or the markets.
In fact, to the contrary, the day traders, jobbers and market makers who
provide the much needed liquidity to our shallow markets, and hence motivate
risk taking, deserve serious tax incentives. Similarly, providers of unsecured
debt take much higher risk and therefore deserve more tax incentives.
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