Impact of the Abolition of CTT
3 Pages Posted: 30 Jan 2011
Date Written: July 8, 2009
Abstract
During the period between 2007 and 2009, the share of “commodity market trading volumes” as a % of “overall financial market trading volumes” has been steadily increasing, while the share of “stock market trading volumes” is on a steady decline. In 2007, the share between equities and commodities was 82% and 18%; and in 2009, the share has reached to 63% for equities and 37% for commodities.
Adding to this steady increasing popularity of commodity trading volumes, the recent Budget proposal of “abolishing CTT (Commodity Transaction Tax) and continuing STT (Securities Transaction Tax) ” can have a huge impact in terms of traders and arbitrageurs shifting their focus to commodity markets from equity markets; and hence share of trading volumes going significantly in favour of commodity markets.
Keywords: India, Indian financial markets, Indian capital markets, commodities, equities, MCX, NCDEX, BSE, NSE, CTT, STT, Commodity Transaction Tax, Securities Transaction Tax, trading volumes, Bombay Stock Exchange, derivatives, National Stock Exchange, Multi Commodity Exchange, National Commodity
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