The changes in taxation of transactions in futures on equity and commodity underlyings

Taxation of transactions in India began with the equity market in 2004. Prior to 2008, the securities transaction tax (STT) was allowed as a rebate against tax liability against Section 88E of the Income Tax Act. This treatment was withdrawn by the 2008 Budget announcement. After that, STT became a substantial influence on the . . . → Read More: The changes in taxation of transactions in futures on equity and commodity underlyings

The rise of high-end finance work in India

Until recently, outsourcing by global financial firms to India conjured up an image of commoditised low end services outsourcing: call centres, peripheral systems programming, and testing and maintenance. However, in recent years, there is a new rise of more sophisticated work. This reflects supply and demand factors. Global financial firms are keen to cut . . . → Read More: The rise of high-end finance work in India

International financial centres: Peering into the future

I did the SIGFIRM Quarterly Lecture at the University of California in Santa Cruz recently:

Also see: Mumbai as an International Financial Centre, a project led by Percy Mistry.

You may like to subscribe to the NIPFP MF channel on . . . → Read More: International financial centres: Peering into the future

Rupee and Real futures at ICE

Intercontinental Exchange has announced cash-settled futures on the Indian Rupee and the Brazilian Real [press release] [Saabira Chaudhuri in the Wall Street Journal]. With this, ICE is the first serious global exchange to start trading in the rupee.

Vimal Balasubramaniam and I have pointed out that the global market for the Indian rupee is adding . . . → Read More: Rupee and Real futures at ICE

The IRR of UIDAI is over 50 per cent in real terms

We have released a cost-benefit analysis of the UID system. In one line, the result of the calculations, under fairly conservative assumptions, is that the IRR of building the system is 53% in real terms. Hence, building UIDAI is a pretty good use of public money.

Through this page, you can access a short . . . → Read More: The IRR of UIDAI is over 50 per cent in real terms

Finding the right path in consumer protection

by Anand Sahasranaman.

The recent approach paper of the Financial Services Legislative Reforms Commission has brought a fresh focus on consumer protection. What are the possible frameworks for financial consumer protection in India, and what would be the core elements of an ideal framework? This is the question that the IFMR Financial Systems Design . . . → Read More: Finding the right path in consumer protection

Blindly sending money down leaky pipes

Proposals to spend more on government programs in India are generally criticised on the grounds that this is sending more money down a leaky pipe. In addition to the problem that the pipes leak, there is an equally big problem that we have no idea about what happens at the other end.

In order . . . → Read More: Blindly sending money down leaky pipes

Rethinking the Statutory Liquidity Ratio (SLR) in Indian banking

by Harsh Vardhan.

The CEO of a leading bank recently caused a flutter in the banking community by demanding the abolition of the Cash Reserve Ratio (CRR). RBI has promptly appointed a committee to look at this issue. The reserve ratios, CRR and SLR (Statutory Liquidity Reserve), are an important feature of Indian banking . . . → Read More: Rethinking the Statutory Liquidity Ratio (SLR) in Indian banking

Preventing shocks or becoming resilient to them?

My previous blog post, on not cancelling trades after a fat finger trade, elicited some interesting email conversations. In a nutshell, there are two views of the world. One camp argues that it is important to prevent fat finger trades and other such weird episodes. This requires building an array of preventive measures. The . . . → Read More: Preventing shocks or becoming resilient to them?

Cancelling trades on an exchange: When is it a good idea?

When inexplicable things happen on an exchange, many people argue that those trades should be cancelled. I think it is useful to be clear about the test to apply for this.

The key question should be: Did something foul up in the order matching software? If order matching went wrong, or if there was . . . → Read More: Cancelling trades on an exchange: When is it a good idea?