Jama kharchi gets the better of CSE

The illegal trades help an individual to evade tax by artificially incurring losses on paper or converting his black money into white by recording profits again on paper.

A study of the official quotation of CSE revealed that such trades have generated nearly Rs 4.5 crore as on Thursday of the total business of Rs 5.8 crore.

The huge volume has been generated by nearly 120 of the 160 stocks normally traded.

The illegal trade has become the lifeline of the bourse, which used to once generate business of Rs 1,500 crore.

CSE authorities feigned ignorance even while brokers and promoters of companies, which are involved in the trade, admitted to a spurt in such trades.

The owner of such a company, who happens to be a stock broker as well, said: "There is no genuine trade on the CSE. We are making both ends meet from jama kharchi," he said.

In the absence of such deals, the CSE would have zilch business, a situation faced by the Delhi Stock Exchange.

The long list of 'jama kharchi' scrips include Nageswar Investments, Classic Growers, Mavens Biotek, Arihant Investments, Blueprint Securities, Diamond Shipping, Global Capital, Shree Tulsi Online.com, Subhas Capital, Valour Construction and Marudar Trading.

In fact, the spurt in such trades on Lyons Range is providing brisk business to tax consultants and chartered accounts in the city.

Jama kharchi reached its height in April following the Union finance minister's proposal to waive income tax on long-term capital gains from secondary market operations.

The finance minister, however, restricted the scope of the tax exemption to companies that comprise the BSE-500 index.