**Market Brief: FM Defends Derivatives Tax Hike & Outlines Fiscal Path** **Finance Minister Nirmala Sitharaman** has strongly defended the hike in Securities Transaction Tax (STT) on Futures and Options (F&O), framing it as a necessary deterrent against excessive speculation rather than a revenue-generation tool. **F&O Hike & Retail Risks** Effective **October 1, 2024**, the government increased the STT on F&O trading to curb "satta" (speculative betting) and protect small investors. * **Futures:** STT raised to **0.05%** (from 0.02%). * **Options:** STT on premium raised to **0.15%** (from 0.1%). The move follows alarming data from **SEBI**, which revealed that **93% of individual traders** in the equity F&O segment incurred losses between FY22 and FY24. The FM highlighted that 9 out of 10 retail participants lose money, with average losses of **₹2 lakh** per trader, necessitating the hike to dampen retail frenzy. **Fiscal Consolidation Roadmap** The government reinforced its commitment to fiscal prudence, aiming to reduce the **Debt-to-GDP ratio to 50% by 2030-31**. * **Current status:** Central Government debt is estimated at **56.1%** of GDP for FY26. * **Deficit targets:** The fiscal deficit is projected to drop to **4.5%** or below by FY26, maintaining a glide path toward long-term stability. **Infrastructure & Political Economy** The budget prioritized capital expenditure in election-bound and strategic regions under the *Purvodaya* initiative: * **Bihar:** Allocated **₹26,000 crore** for road projects (including Patna-Purnea Expressway) and a new **2,400 MW** power plant at Pirpainti. * **Andhra Pradesh:** Secured **₹15,000 crore** in special financial support, with a commitment to complete the **Polavaram Irrigation Project** and develop industrial nodes at Kopparthy and Orvakal. **Rural & Social Spending** Countering criticism regarding social sector cuts, the FM emphasized increased allocations for health, education, and youth skilling. * **Rural Employment:** The allocation for **MGNREGA** stands at **₹86,000 crore**—matched to demand but scrutinized against the previous year’s higher actual expenditure of ₹1.05 lakh crore. * **Focus:** The strategy pivots toward "employability" via internship schemes and skilling 20 lakh youth, incorporating feedback from the demographic dividend.