The Tobin Tax, named after Nobel Prize-winning US economist James Tobin, was proposed in 1971 for the first time with the intention to levy it on short-term capital currency transactions. whenever currency crises have erupted, the proposal for a levy on international currency transactions has been debated.
- Tobin tax as a tool to discourage speculative currency trading and reduce exchange rate volatility. The Tobin tax is often referred to as the Robin Hood tax, as many see it as a way for governments to take small amounts of money from the people making large, short-term currency exchanges.
- The Securities Transaction Tax applicable on stock market transactions in India is a similar tax intended to discourage short-term investments.
- According to International Monetary Fund (IMF), a Tobin tax might reduce market liquidity and effectively increase volatility — clearly contrary to its suggested purpose. The legislators should thus consider a Tobin tax proposal only in the event there is a similar imposition at international level as unilateral measures can prove more damaging than the exchange-rate instability they are designed to cure. Rigid controls can cut India off from economic reality, and make the country uncompetitive.
JPSC Notes brings Prelims and Mains programs for JPSC Prelims and JPSC Mains Exam preparation. Various Programs initiated by JPSC Notes are as follows:-
- JPSC Mains Tests and Notes Program
- JPSC Prelims Exam 2020- Test Series and Notes Program
- JPSC Prelims and Mains Tests Series and Notes Program
- JPSC Detailed Complete Prelims Notes