STT on F&O trading

The news of the implementation of enhanced STT rates for F&O trading would be viewed with mixed reactions. While the SEBI report highlighting individual traders losing more than ₹1.8 lakh crore in F&O trading between FY22 and FY24 is concerning, consistently targeting local retail traders instead of ensuring a level playing field between foreign and domestic traders is not the right approach.

Foreign traders have a distinct advantage due to favourable tax policies, access to advanced technology such as algorithmic and high-frequency trading platforms, quicker access to market data, and proximity to exchanges. This technological and strategic edge allows them to outperform domestic traders, contributing to significant losses for the latter. Furthermore, domestic retail traders are taxed at income tax slab rates, which can reach as high as 30 per cent, whereas foreign investors are taxed at lower capital gains rates. The government needs to differentiate between foreign investors who merely repatriate profits from F&O trading for their own benefit and those whose investments lead to long-term gains for the nation. The vital role of domestic investors in providing market depth and liquidity must not be overlooked.

Srinivasan Velamur

Chennai

RBI Governor’s tenure

The article ‘Time to review RBI Governor’s tenure’ (September 30) made for a good read. The government at the Centre and the RBI should complement each other to achieve macroeconomic objectives. Put differently, fiscal policy and monetary policy should go hand in hand to achieve economic growth with stability. In that way, one feels, the Narendra Modi government and the present RBI governor Shaktikanta Das have a good chemistry, and hence one wishes that the latter continues for a few more years.

S Ramakrishnasayee

Chennai

UBI may not deliver

This refers to ‘A case for universal basic income’ (September 30). UBI is a concept born in some European nations that had attained a level of economic inclusiveness that could provide good and sustainable basic welfare besides boasting of higher economic equality. With technology comes the need for skills and they found that it makes greater sense to provide for the likes of UBI to a smaller proportion of citizens than create obsolete and unproductive jobs for them and skew overall economics. This approach would not suit lesser nations where in the absence of basic supportive living needs, even generous income doles can never be sufficient.

R Narayanan

Navi Mumbai

Labour force survey

The recently released periodic labour force survey has once again underscored the lack of quality jobs in the country even as the economy is pegged to grow at 7.2 per cent. While labour force participation (15 years and above) has risen from 49.8 per cent in 2017-18 to 60.1 per cent in 2023-24, mainly due to the sharp rise in female participation, the share of women engaged in salaried employment has fallen. Per the survey, a large section of the labour force continues to be employed in informal firms. With the production process now becoming more capital-intensive and labour-saving, policymakers have the tasks cut out to create remunerative and productive employment opportunities for the country’s educated unemployed youth, whose numbers keep increasing by day.

M Jeyaram

Sholavandan, TN