Mulayam agrees to cut duty on bourse deals

At a time when there is a question mark on his continuance in power, UP Chief Minister Mulayam Singh Yadav has agreed to bring down the duty on share transactions to make it at par with states like Maharashtra, Gujarat and Rajasthan.

This follows the assurance to the stock exchange members by Yadav's financial advisor Surendra Mohan that the chief minister agrees with this demand of stockbrokers.

Sushil Kanodia, president, UP Stock Exchange Brokers Association, told Business Standard that the chief minister had given time to the UPSE delegation to meet him in the next four days.

The issue arose when UP imposed a stamp duty on share transactions much higher than that imposed by other states. In UP for a transaction of Rs 20 the stamp duty came to Rs 1,000; in other states it was only Rs 40. Besides other states, as was pointed out by a leading broker Padam Jain, had introduced differing rates for delivery-based, non delivery-based and derivative segments, but UP has not gone into these details.

Brokers had feared the stock exchange, which still had transactions among all regional stock exchanges, would see business going out of the state.

Although optimism is running high on this score, there are deep forebodings on the important issue of demutualisation. Stock Exchange Administrator K D Gupta said: "I have been speaking to the brokers to sell their non-trading shares, so that we could reach the limit of 51 per cent; but they, as yet, have not bothered to heed this suggestion."

Asked if there is any chance of any strategic investor picking up a stake in UP or other regional stock exchanges, Gupta said it was highly unlikely. "The basic problem is that the central government has not done anything to revive the exchanges. They had promised but that has not been carried out," Jain said.

"We are eagerly awaiting the Budget presentation and we hope to see some forward movement," he said.