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Capital market representatives held a pre-Budget discussion with the Finance Minister where they asked for a reduction in transaction taxes and changes aimed at improving market efficiency and participation. Industry bodies highlighted the rising contribution of capital markets in resource mobilisation, which crossed INR 14.6 lakh crore in FY25, driven largely by equity and debt instruments. Officials from key financial institutions attended the meeting, which forms part of the government's annual consultation process before the Budget. With Budget 2026-27 set to be presented around February 1, the government is expected to focus on demand revival, job creation and maintaining stable growth.
Representatives from the capital markets met the Finance Minister this week and requested reductions in transaction taxes along with broader steps to deepen India's financial sector. During the discussion, they put forward suggestions aimed at improving market efficiency and increasing participation across segments. According to officials present, the industry emphasised the need to lower the Securities Transaction Tax on cash market trades, noting that the current structure places a higher burden compared to derivatives. Advertisement
This interaction formed the fourth round of pre-Budget consultations between the Finance Minister and stakeholders from the capital markets. Senior representatives from BSE, Multi Commodity Exchange, the Association of Mutual Funds in India, the Association of Registered Investment Advisers, and the Commodity Participants Association of India were part of the meeting. Union Minister of State for Finance Pankaj Chaudhary, the Department of Economic Affairs Secretary Anuradha Thakur, Chief Economic Adviser V. Anantha Nageswaran and other senior finance ministry officials were also in attendance.
Participants highlighted that capital markets mobilised around INR 14.6 lakh crore in FY25, reflecting a 33% rise from the previous year. They noted that while the use of instruments such as equity, debt, REITs and InvITs continues to expand, equity and debt markets still accounted for approximately INR 14.2 lakh crore, reinforcing their role in funding growth and supporting investment needs.
The government has been conducting a series of pre-Budget meetings over the past week. Before meeting the capital markets, the Finance Minister had held separate discussions with economists, representatives from the agriculture sector and MSME industry bodies. These meetings are part of the annual exercise undertaken before the Union Budget is finalised.
The upcoming Budget 2026-27, expected to be presented on February 1, will be prepared amid global uncertainties, including the recent US move to impose a 50% tariff on shipments from India. Policymakers are expected to address demand-related challenges, employment generation and the need to steer the economy consistently above 8% growth. For the current financial year, the government has projected GDP growth in the range of 6.3% to 6.8%.
Source PTI
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