Sunil Nyati, Managing Director of Swastika Investmart, expects the securities transaction tax will be removed in the Union Budget, which will be presented by the Finance Minister on February 1. STT was introduced in the Union Budget 2004.

"I believe STT should be removed or at least reduced because initially it was introduced in the place of long-term capital gain but now, we have both LTCG and STT that is not fair for the Indian Investors," he said.

Stock market penetration is increasing in India and it is anticipated that the government will take policy measures to ensure that the Indian market becomes more investment-friendly in comparison to other emerging markets where reducing LTCG and STT could be a good step in that direction, he further said and added: "The transaction cost in India is too high and LTCG and STT are seen as a sentiment dampener for the market".

‘Reformist Budget’

According to Nyati, market wants a Budget that should be reformist and pro-growth and must focus on real estate and auto sectors.

"We hope that the government will maintain its fiscal expenditure high with a focus on infrastructure. Though there were several announcements for the infrastructure sector that need to be continued, however, there is a need for some significant measures for the real estate and auto sector to create multiplier effects because these two sectors create jobs and growth in multiple sectors."

Salaried class benefits

Besides, the Government should increase the tax benefits for housing loans because it is almost at the same level for the last many years. "There were many steps taken by the government in the last one year to boost the economy but there was no direct focus to boost consumption therefore the market will like to hear some significant announcements for salaried class," he said.

The market will also like more clarity and pace in the government’s asset monetisation and divestment program. The world is facing many supply-side issues and India can turn some challenges into opportunities therefore the government should focus on some areas in the upcoming Budget.