The Modi government has proposed a new tax in this year’s budget. This has put pressure on the country’s derivatives market. That is, people who invest in bonds can be affected by this tax. Know what is the whole matter…
People Derivatives or Bond Market for Safe Investment (Bond Market) But trust a lot. In the last few years, trading in derivatives has increased the sovereign bond market in India. (Sovereign Bond) The demand has increased a lot. But now the clouds of crisis are seen hovering over this market. Due to the one tax proposed by the government in the budget, the pressure on the derivatives market is increasing.
The Modi government has proposed to impose tax on high-value insurance policies in the budget. Experts believe that this will reduce the demand for insurance in the market. At the same time, there is no emphasis on encouraging savings in the new income tax system. This may also reduce the demand for insurance.
There will be a change in the strategy of insurance companies
Experts say that this may cause insurance companies to rethink their strategy of investing in bonds. They can reduce their investment in this segment. In the last two years, banks have increased their investment in the debt or bond market. For this, he has also given the option of swapping the interest given to the insurance companies.
With this offer of banks, insurance companies get benefits on bonds without much change in their balance sheet. (Future Yield) Gave an opportunity to invest for. According to an estimate, banks have bought government bonds worth about $ 19 billion.
If this investment from banks or insurance companies decreases, then the pressure to buy bonds will increase on the Reserve Bank of India. One reason for this is that Prime Minister Narendra Modi has insisted on increasing debt sales to support the market.
Government debt purchase will fall
Now the trade in the bond market can fall by 15 to 20 percent due to change in tax rules or making the new tax system the default tax system. Due to this, government debt purchase can fall in the market. In the recent past, the debt burden on the country has increased.
Source: www.tv9hindi.com
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