Markets fell, then recovered: FM explains STT increase, volatility and debt roadmap

In an exclusive interview with Times Now’s Navika Kumar, Finance Minister Nirmala Sitharaman has defended the government’s decision to hike Securities Transaction Tax (STT) on futures and options trading. Research shows that 90% of retailers suffered heavy losses in the speculative segment. The clarification comes after markets experienced significant volatility following the Budget announcement.

The STT increase was aimed at curbing speculation, not generating revenue

Speaking about the market’s initial decline of 1,500 points after the Budget, Sitharaman stressed that the STT correction was “much needed” to protect retail investors. “We’ve had people calling us saying people are losing money badly,” she said, adding that the measure was intended to discourage speculative trading rather than increase government revenues.

The Finance Minister noted that Hindi newspapers had reported extensive ‘satta’ (gambling) operations in the F&O segment. She clarified that the STT increase was selective and focused only on futures and options, while other securities were left untouched.The markets recovered sharply the next day, gaining around 2,400 points. Sitharaman attributed the recovery to multiple factors, including her team’s clarifications and positive sentiment around potential investment inflows and the India-US trade deal.

FM refutes opposition claims on healthcare and education spending

Responding to opposition criticism over reduced allocations for health and education as a percentage of the total budget, Sitharaman challenged critics to read the budget documents more carefully. She highlighted several initiatives not mentioned in her speech, including:

“From budget to budget, nothing has happened,” the finance minister claimed, challenging opposition members to compare year-on-year figures instead of percentages.

The government aims for a debt ratio of 50% in the period 2030-2031

Responding to Congress MP Manish Tewari’s criticism over the high debt burden, Sitharaman outlined the government’s commitment to fiscal consolidation. She announced plans to reduce central government debt to 50% of GDP (plus or minus one percentage point) by 2030-2031. The FM revealed that her ministry is working with several state governments to restructure their debts and help them reduce the burden of expensive loans. “Some prime ministers have appreciated this move, and they do not belong to my party,” she noted, although she declined to name specific states.She acknowledged Tewari’s research-based approach to policy criticism while pointing to Punjab’s debt situation as an example of budgetary problems at the state level.

States that are bound by elections get a boost in terms of infrastructure

Addressing criticism over the lack of announcements for election-bound states, Sitharaman described several major projects allocated to states heading for elections:

Kerala and Tamil Nadu: Rare Earth Corridor, High Speed ​​Train to Chennai, Coconut Promotion Program with Replacement Saplings for Old Trees

West Bengal: East-West Corridor from Durgapur to Dankuni (a project announced but not implemented by Mamata Banerjee during her tenure as Railway Minister)

The Finance Minister emphasized that the budget covers all states, whether election-bound or not, noting that it was impossible to mention every state in a 90-minute speech.

₹1.25 lakh crore total allocation for rural employment

Sitharaman revealed that in addition to the ₹95,000 crore allocated for the renamed MGNREGA (now Garib Kalyan Rojgar Guarantee Yojana), the government has provided another ₹30,000 crore to clear outstanding dues to states, taking the total rural employment allocation to ₹1.25 lakh crore.

“Protesters of the Garib Kalyan Rojgar Guarantee will never acknowledge this,” she noted, adding that critics often create perceptions without reading the detailed budget documents.

Generation Z’s input shapes budget priorities

On a lighter note, the Finance Minister discussed her enthusiastic engagement with youth, revealing that budget inputs came from students through the MY Bharat platform. She had invited 30 to 33 first and second year students from across India to watch the budget presentation from the gallery and then interact with her.

“By 2047, India should be something they will be proud of as an Indian citizen,” Sitharaman said, explaining the youth-oriented orientation of the budget planning.

Promotion of handlooms through ‘sari diplomacy’

When asked about her strategic sari choices for the Budget day, the Finance Minister confirmed that she is deliberately using the platform to promote Indian handlooms. This year’s Kanjivaram ahead of the Tamil Nadu elections follows last year’s Madhubani before the Bihar elections and a Karnataka wave before the elections there.

“I only wear handlooms, budget or no budget. I don’t wear machine-made ones,” she stated, adding that while she appreciates conversations about her saris, she wants equal attention for her policy work – a concern she says applies to all ministers, regardless of gender.

FM is open to discussions about the opposition’s budget

Reacting to the parliamentary standoff over the budget talks, Sitharaman expressed his willingness to engage with opposition members outside the House. “I don’t mind calling them and saying you want to talk,” she said, comparing it to her successful youth outreach sessions.

She stressed that much of the budget content was not covered in her 90-minute speech, and urged critics to examine the detailed documents before asking questions. “Please go into details and then ask me questions. I will be happy to answer,” the Finance Minister concluded.

Key Takeaways

• STT increase on F&O intended to protect 90% of retailers losing money, not revenue

• The government aims for a debt ratio of 50% in the period 2030-2031

• ₹1.25 lakh crore total allocation for rural employment, including clearing arrears

• Major infrastructure projects announced for all states subject to elections

• Youth input from the MY Bharat platform included in the budget planning

• Finance Minister is open to detailed budget discussions with opposition outside parliament