STT Hike: Government Gains ₹10,000 Cr, Market Loses ₹10 Lakh Cr? The Full Story

• A budget decision to increase Securities Transaction Tax (STT) is projected to generate an additional ₹10,000 crore for the government.
• On budget day, the market capitalization reportedly dropped by ₹10 lakh crore, primarily due to the STT hike.
• Traders and brokers fear higher transaction costs will reduce derivatives trading and impact brokerage firm revenues.
• Some long-term investors support the STT hike to curb excessive retail speculation, citing SEBI data on retail trader losses.
• Market experts warn that a significant decline in derivatives volumes could make the government's ₹73,700 crore STT target for FY27 challenging to achieve.

Why It Matters: The STT hike aims to boost government revenue and curb speculation, but faces market apprehension over volume decline.