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Union Budget: STT rationalisation could boost FPI inflows, says Jio BlackRock CIO

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In the forthcoming Union Budget, which will be unveiled on February 1, Jio BlackRock Mutual Fund has recommended that the government take into account rationalising the Securities Transaction Tax (STT) in the cash market.

Speaking to PTI Videos, Jio BlackRock Chief Investment Officer Rishi Kohli said, “One of the easiest things to look at is the STT, especially in the cash market, because that is quite high 10 basis point compared to the brokerages that you are paying.”

He noted that rationalising STT could help deepen the cash market, which currently remains much smaller than the derivatives market.

Highlighting regulatory intent, Kohli said, “There is also the interest from the government and Sebi regulator side to deepen the cash market compared to the derivative market,” Kohli said, "I think one way to encourage that is to look at rationalising the STT.

Kohli further pointed out that a rationalised STT structure could attract greater foreign participation while also benefiting domestic investors. “STT rationalisation can not only get FPI flows into the market which is also required now for currency, but also help the domestic market participants.”

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