Budget Reactions: Budget focus on RGESS to boost retail investment: ICRA

Subrata Ray
ICRA

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The proposal to increase income limit, avenues and time frame for retail investors under the RGESS is expected to invite a higher degree of retail participation in the Indian capital markets over the medium term.

Allowing Mutual Fund distributors to become members of the stock exchange could also help increased channelization of retail savings into capital markets.

 Simplification of KYC norms for FIIs and elimination of ambiguity in classification between FII and FDI could ensure greater FII registration and enhanced flows over the medium term.

 Introduction of commodities transaction tax is expected to impact volumes on the commodities exchange in the near term. However, over the medium term, the extent of the proposed  taxation (0.01%) may not be strong enough to disrupt proprietary activity and consequently growth of the segment may not be significantly impeded.