“On the face of it, there is obviously disappointment for the capital markets, but if we go through the fine print, spending on rail, defense and infrastructure appears to have increased and that is one of the reasons why the markets have recovered. The only thing that is a bit disappointing is this annual adjustment to the STT rates and capital gains tax rates, which is causing unnecessary irritation,” he said.Singhania added that while discouraging speculation makes sense, frequent changes reduce predictability.
“Yes, it makes sense to discourage people from speculating, but we just have to put our minds together and say this is what we are going to do and it will continue to be this way for the next three to four years,” he said.
He also pointed out that the change in the purchase tax has yielded a marginally positive result, but emphasized the need for a stronger push to support India’s long-term growth ambitions.
“If we have to go from $4 to $8 trillion, $10 trillion, especially in a scenario where the world is so volatile, there are so many headwinds, multiple wars and this tariff thing is lingering, we need a very conscious push,” Singhania said.Market declines are not a tactical trigger
On whether the day’s decline presents a buying opportunity, Singhania cautioned against reacting to short-term volatility.
“If you are positive about India from a three-five year perspective, then every day is an opportunity. The fact that markets are down 1-2% today does not make the country more or less attractive,” he said.
He advised investors to focus on asset allocation rather than chasing short-term declines.
“Read the fine print, look at your asset allocation, see if you already have equity exposure and stick to it. Don’t jump in just because some stocks are down 2-5%,” he added.
Foreign outflows and policy stability key
With foreign outflows of over $22 billion, concerns remain over whether the budget can revive interest from foreign portfolio investors (FPI). Singhania underlined the increasing pressure on capital markets and the importance of clarity on long-term policies.
“There is always a last straw on the camel’s back. We cannot bear more burdens as far as capital markets are concerned. We can say all the good things on TV, but we have to be realistic and say that capital markets are very important to take the economy to 4 to 8 to 10 trillion,” he said.
He emphasized that private sector growth and large-scale investment in India have been made possible by strong equity and fixed income markets.
“It’s okay to make money at some point. You just can’t say that these participants make more money, so tax them more. In the future, you announce that we won’t change anything for the next three years and life can be more predictable,” Singhania said.
The banking sector remains a bright spot
In banking and financial services, Singhania scored a positive note, citing improved asset quality and operational efficiency.
“Banking as a sector has made a lot of progress. NPAs are in control. Systems, processes and efficiencies have gone through the roof. Even PSU banks have net NPAs of half a percent or lower, which is music to our ears,” he said.
He credited the government for reducing interference in the functioning of banks and said the sector is structurally stronger.
However, he reiterated that stable tax and policy frameworks are critical to rebuilding confidence, especially in a year marked by heavy foreign outflows.
“If participants have clarity on taxation from a three- and five-year perspective, planning becomes much easier. These wild swings, especially in the stock markets, do not inspire confidence,” he said.
Singhania added that reviving foreign flows would help stabilize the rupee, further reduce interest rates and support capital formation – a key requirement for India’s next phase of economic expansion.
“Eventually, foreign flows will come and the rupee will be stable. Yields can go back to 6.3-6.4% and it would help all constituents including bond markets, banks and capital formation, which is the need of the hour to take the economy to $8-10 trillion,” he said.
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