New Delhi, March 24 Citing the erosion of Rs 48 lakh crore in wealth from Indian stock markets since the beginning of the war in West Asia, AAP MP Raghav Chadha on Tuesday urged the government to provide relief to retail investors.
Participating in a discussion on the Appropriation Bill (No 2) in the Rajya Sabha, he said the conflict in West Asia is not "our war", but its impact was seen in the Indian market.
"This is a 'Black Swan' event because it has been triggered suddenly and externally, and it is unrelated to the underlying Indian economic fundamentals," Chadha said.
He said that global financial markets are witnessing volatility due to the ongoing escalation in West Asia, and India has also seen a sharp erosion of investors' wealth.
Chadha said that due to this geopolitical crisis, the country's economy, especially the Indian stock market, has suffered a significant shock.
He said that from February 28, the first day of the war, to March 23, approximately Rs 48 lakh crore of investors' wealth was eroded from the Indian markets.
"This wealth disappeared from the market, and became zero," said the Aam Aadmi Party's Rajya Sabha member from Punjab.
He said that foreign portfolio investors (FPIs) withdrew Rs 52,000 crore from the Indian markets between March 1-15.
"The rupee reached 94. All these things are not routine corrections. This is a conflict-driven shock," Chadha said, citing concerns for approximately 13.5 crore market investors in India.
"The government cannot ignore the impact of external shocks on household wealth. Therefore, I urge the government to provide some relief to Indian investors. The first possible relief is to provide targeted relief to retail investors," he said.
Chadha said that when an Indian retail investor buys shares in the market, he has to pay brokerage fees, securities transaction tax (STT), exchange charges, GST on these charges, and stamp duty.
"And after all these charges, if there is a profit, there is a 20 per cent short-term capital gain tax and a 12.5 per cent long-term capital gain tax applicable," he said. "If the government provides some limited relief on transaction costs, then investor sentiment could be boosted. I am not asking for market populism. I am asking for targeted investor protection," he said.
Chadha also urged the government to allow investors to carry forward capital losses for a longer period.
"The Income Tax Act allows carry forward market losses for up to eight years. This should be increased to 12 to 15 years," he demanded.
Chadha said that the country's fundamentals are strong.
"What needs strengthening is the policy shield that surrounds our investors, because this is not our war, but our investors are bearing the brunt," he added.