Chidambaram hints at more measures to boost markets and MF industry

Decision on including MFs in Rajiv Gandhi Equity Scheme shortly

A day after the announcement of steps to boost the mutual fund (MF) industry and primary market by the Securities and Exchange of India (Sebi), finance minister P Chidambaram today indicated that more such steps would be rolled out next month.

The finance minister also said a decision on including MFs in the Rajiv Gandhi Equity Savings Scheme (RGESS), as suggested by Sebi, would be taken soon.

Chidambaram said there were a number of other suggestions which were under consideration by the government.

“When Shri U K Sinha, Chairman, Sebi called on me on August 14, 2012, I had requested him to examine those suggestions independently and advise me. The examination by the government and Sebi is likely to be completed in the next two weeks. I have requested Chairman, Sebi to schedule another meeting of the Board in early September when some more decisions can be taken on the suggestions that are under examination,” said the finance minister.

He added that the government had also taken note of the recommendation of Sebi that RGESS should also provide for investments in equity schemes of mutual funds, which have the securities allowed under RGESS as the underlying.

“I have asked the department of economic affairs, capital markets division, to examine the recommendation of Sebi and I expect that it would be possible to take a decision shortly.”

Expressing satisfaction over the decisions taken by Sebi in its board meeting on Thursday, Chidambaram said the steps were welcome in the context of his statement on August 6, in which he had said: “In the next few weeks, we will announce a number of decisions to attract more people to invest in mutual funds, insurance policies and other well-designed instruments.”

Chidambaram stressed that the Sebi measures will stimulate financial savings among households as well as give a fillip to the MF industry and more and more households should be encouraged to save in financial instruments rather than in gold.