Budget 2025: Renowned investor Shankar Sharma calls for a reduction in capital gains tax and the elimination of STT. Know what he said? He also discusses Donald Trump's conduct in the United States.
Ace investor Shankar Sharma, the creator of the AI-tech business GQuant, pushes for radical tax reforms—scrapping STT and lowering capital gains tax—arguing that boosting it was a mistake as expectations rise for a pro-growth and reform-oriented Budget 2025. Sharma contends that raising government expenditures is a short-term tactic.He also talked about why Donald Trump poses a greater threat to the United States than to the rest of the world in an exclusive interview with Nishant Kumar of Mint. The following are modified quotes from the interview:
In your view, what would make this year's budget market-friendly?
They ought to eliminate STT and lower the capital gains tax on stock investments. It was a foolish decision to raise the capital gains tax. unadulterated and straightforward.
In the current climate, which industries seem the most promising to you, and why?
I'm not interested in sectors. The greatest market for bottom-up prospects is India. There will be many of opportunities, even with poor macros.
What is your opinion of the present market trend? Are there any further threats to the downside?
After the epidemic lows, we have had five excellent years of a bull market. The bull market is aging as a result. This by no means qualifies as young.
A bull market might have dismissed such news when it was younger, but as it ages, it begins to react negatively to it. Thus, there is widespread exhaustion.
Is the "India growth story" narrative becoming less appealing in light of downward adjustments to the country's GDP growth estimates?
Government capital expenditure, or capex, was the foundation of India's growth story, and I have discussed this in multiple interviews with your publication.
As the government begins to tighten the fiscal deficit, which is precisely what is occurring, this expansion will eventually slow down.
Government spending-based growth has a limited duration. This period of high growth for the nation is getting closer.
How much of a concern does the "Trump factor" pose to developing nations like India?
America is more at risk from Donald Trump than the rest of the world. Raising tariffs appears to be his only idea, and I don't see how in the world it will benefit America.
Simply said, it will lower Americans' purchasing power and increase inflation and the cost of products.
Consider it this way: he has vowed to raise coffee tariffs on Colombia. Assume that 1,000 tons of Colombian coffee were imported each year at a price of $5 per kilogram. If the cost per kilogram drops to $6 because of tariffs, do you think Americans will start consuming less coffee? Absolutely not.
As a result, their wallets will be smaller for other purchases since they will have to pay more for their coffee.
I believe that Trump is awful for America and that the rest of the world doesn't care much about him.
Should the government prioritize growth by raising spending, even at the expense of fiscal reduction, in an era of growing protectionism?
This is a short-term approach that cannot be sustained over time since it leads to a rise in public borrowing to finance such expenditures, which pushes out private capital expenditures by raising the cost of capital. India must look for growth levers other than government capital expenditures.
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