This could cool derivative activity and lead to a reduction in volumes
FinTech BizNews Service
Mumbai, 1 February 2026: Union Minister of Finance & Corporate Affairs, Smt. Nirmala Sitharaman said that the Government led by Prime Minister Narendra Modi, has decisively and consistently chosen action over ambivalence, reform over rhetoric and people over populism.
While presenting the Union Budget 2026-27 in Parliament today, she said that the Government is inspired by 3 kartavya, out of which the first kartavya is to accelerate and sustain economic growth, by enhancing productivity and competitiveness, and building resilience to volatile global dynamics.
Shripal Shah, MD & CEO, Kotak Securities, states:
“The steep increase in STT on futures and options, coming on top of last year’s hike, is likely to raise impact costs for traders, hedgers, and arbitrageurs. This could cool derivative activity and lead to a reduction in volumes. The intent appears to be volume moderation rather than revenue maximisation, as any potential revenue gain could be offset by lower derivative volumes.”
Increase in STT has been a dampener for equity; A realistic budget with focus on fiscal consolidation and stability
Ms. Anitha Rangan, Chief Economist, RBL Bank, explains: “With a steady spend on capex and keeping overall fiscal consolidation at 4.3% for FY27, gross borrowing inline with expectations and revenue growth inline with GDP growth, overall the budget manages spending with stability. Focus on manufacturing, rural side and youth with policy continuity indicates that the budget is more focused on continuity of reforms. While the increase in STT has been a dampener for equity, it should recover with the growth focus. For debt market the gross borrowing number may be slightly higher and supply absorption especially from banks will remain the key focus. However fiscal consolidation and realistic assumptions is a positive that budget numbers are achievable.”
