Indian stock market has experienced a significant decline since October 2024, with market capitalization dropping by approximately ₹74 lakh crore by March 2025. This downturn followed a long period of growth, during which benchmark indices like NSE NIFTY-50 and BSE Sensex reached all-time highs until September 2024. The fall is attributed to multiple factors, including global economic uncertainties, geopolitical tensions, and domestic macroeconomic conditions. Despite the current dip, Indian markets have shown robust long-term growth, with the NIFTY-50 index delivering an 11.13% CAGR since its inception in 1996. Addressing concerns about restoring market confidence, the government clarified that there is no proposal to abolish long-term capital gains (LTCG) tax. Instead, Budget 2024-25 introduced measures to rationalize and simplify the LTCG tax regime, including changes in holding periods and tax rates for various capital assets. These reforms aim to maintain a balanced and structured approach to taxation without immediate changes in market policies.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF ECONOMIC AFFAIRS
RAJYA SABHA
UNSTARRED QUESTION NO. 2768
ANSWERED ON TUESDAY, MARCH 25, 2025/ 4 CHAITRA, 1947 (SAKA)
HISTORICAL FALL IN STOCK MARKET
- Shri Javed Ali Khan:
Will the Minister of Finance be pleased to state:
(a) whether around ₹ 94 lakh crores have been wiped out in stock market since October, 2024 till date due to historical fall in stock market during the last 30 years;
(b) if so, the details thereof and the reasons therefor;
(c) whether Government would abolish long term capital gain tax immediately to restore the sentiments of market and to arrest the free fall of market;
(d) if so, the details thereof; and
(e) if not, the reasons therefor?
ANSWER
MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) & (b): Stock market movements are a function of investor perceptions along with other factors which may include, inter-alia, global economic scenarios such as geo-political uncertainties affecting foreign capital flows, domestic macro-economic parameters and overall corporate performance.
The stock market benchmark indices, NSE NIFTY-50 and BSE Sensex, showed a consistent upward trend until September 2024, scaling new all-time highs. This trend has, however, moderated since October 2024. The market capitalization of all companies listed on NSE and BSE has reduced by around ₹74 Lakh crore since 1st October, 2024 till 18th March, 2025.
Notwithstanding this fall, the Indian stock markets have consistently performed positively for long term investments. The benchmark NIFTY-50 index has yielded a price return of 11.13% on compounded annual growth rate (CAGR) basis since its inception in 1996.
(c) to (e): No proposal to abolish long term capital gains tax is currently under the consideration of the Government. Union Budget 2024-25 introduced significant changes to rationalize and simplify the long-term capital gains tax regime, including rationalization of holding periods and rates of taxation for financial and non-financial capital assets.
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