Need a sense of caution against speculative activities: FM Sitharaman on equity market

Union Finance Minister Nirmala Sitharaman on Monday said there needs to be a sense of caution against speculative activities in the equity markets. When asked about increased speculative activities in the market, Sitharaman said that market regulator Sebi and RBI have also expressed concerns.

Also Read: ‘Even Mrs Gandhi would not do it’: FM Sitharaman’s veiled jibe at Rahul Gandhi

In a conversation with Network 18 Editor-in-Chief Rahul Joshi at News18's 'Chaupal’ event, Sitharaman said that “we will have to encourage markets to be robust. But when speculative activities are too much, there needs to be a sense of caution.” She further added that “We need to make sure people don’t go to high-risk ventures with their life savings.”

'We are looking at various ways to benefit middle class,' says Sitharaman

"Since 2019, the attempt is to simplify the direct taxation. After much discussion new direct tax regime has been brought in with lower rates," the Finance Minister said. She also said that "no direct tax rate has been increased in the Union Budget. In fact, standard deduction was increased keeping middle class in mind." She further added that "new tax regime was brought in to simplify compliance, thus exemptions removed. More than 78% people moved from old to new tax regime."

Apart from this, Sitharaman also spoke on the issue of GST. "Group of Ministers are working on simplifying rates and bringing it down. The way to do it will have to be decided by GoM and later the council," the finance minister said.

In July, SEBI chief Madhabi Puri Buch stated that the increasing volumes in the derivatives market have evolved into a macroeconomic concern, rather than being a risk limited to a small group of individual investors.

Caution on F&O euphoria

Buch's remarks come amid repeated warnings from financial regulators about the growing enthusiasm in the Futures & Options (F&O) segment.

In June, Moneycontrol reported data from the Futures Industry Association, revealing that 8,484 million contracts were traded on the NSE in April, making it the top global exchange by trading volume. The BSE followed, with just over 2,224 million contracts traded that same month. Together, the two Indian stock exchanges contributed to over 80% of the global turnover in April.