'No idea where the markets go from here, if this continues, govt will...': Nithin Kamath, Ashneer Grover replies...

Zerodha co-founder and billionaire Nithin Kamath, in a recent post on X (formerly Twitter), said that the Indian share markets are experiencing a steep drop in both trading volumes and the number of traders, warning that continued low activity could significantly reduce the government’s Securities Transaction Tax (STT) revenue for the 2025-26 fiscal year.

"The markets are finally correcting. Given that markets swing between extremes, they can fall more just like they rose to the peak," he wrote.

Kamath noted a more than 30% decline in market activity across brokerage firms. He also expressed uncertainty about where the markets might head next, pointing out that swings can be just as dramatic downward as they are upward.

"I've no idea where the markets go from here, but I can tell you about the broking industry. We are seeing a massive drop in terms of both the number of traders and volumes," Kamath expressed.

He cautioned that if the slowdown persists, the government might not even generate Rs 40,000 crore in STT during FY25-26—half of the roughly Rs 80,000 crore initially projected.

"By the way, if this continues, the government will not make even Rs 40000 cr from STT in FY 25/26, at least 50% below the Rs 80,000 cr estimate," he added.

The markets are finally correcting. Given that markets swing between extremes, they can fall more just like they rose to the peak.

I've no idea where the markets go from here, but I can tell you about the broking industry. We are seeing a massive drop in terms of both the number… pic.twitter.com/wHO6hSRdbA

— Nithin Kamath (@Nithin0dha) February 28, 2025

The Indian stock market has been undergoing a correction phase in recent months, with benchmark indices Nifty and Sensex falling sharply from their record highs last year.

According to media reports, this downturn is driven by concerns over former U.S. President Donald Trump’s tariff policies, weak global economic indicators, and sustained selling by Foreign Institutional Investors (FIIs).

Ashneer Grover responds

Responding to Kamath's post, BharatPe co-founder and former Shark Tank India judge wrote, "High time for government to abolish Capital Gains Tax! These markets aren’t going to correct by themselves - need structural change."

High time for government to abolish Capital Gains Tax ! These markets aren’t going to correct by themselves - need structural change

— Ashneer Grover (@Ashneer_Grover) February 28, 2025