Budget 2016: Higher tax exemptions for MF investors should help

Aashish SomaiyaaMotilal Oswal AMCI have only two expectations from the upcoming Union Budget 2016 to be presented by the Honorable Finance Minister Shri Arun Jaitley.Firstly, the government needs to give serious thought to encouraging equity investing for Indians on a sustainable basis. We make too many policies and we are continuously reviewing all of them. If we keep making policies and we keep reviewing them and making regulatory changes when does one actually execute on the business front? Over the last two years, Indians have come back to investing into equities. And when I say we need to encourage Indians investing into equities, I am not getting into short term or long term return profile on equities. We simply need to get Indians to invest in capital markets from perspective of Indians owning India and her growth. With the recent sell off by FIIs, it’s a great opportunity for Indian investors to reclaim some of that ownership. Nearly 25% of Indian public equities are owned by foreigners and probably even more of the yet to be listed space. If the sequence of events continues this way, eventually we Indians will only remain workers with different hues of colors of collars working for foreign owners. I see America is owned by Americans except that they keep debating the definition of “America” and hence its immigration policies. India is a different case, we don’t seem to have any issues on defining “Indian” just that we will not be owned by Indians very shortly. We are running the risk of having a corporate sector owned by foreigners and hence an administration influenced by them. It is very sad to note many a times as Indian policy makers and various agencies debate capital market investing and its costs while Indians lose money to chit funds and the likes.Being part of the mutual fund industry I would like to have higher tax exemptions for investors allocating their savings or their capital gains into mutual funds. While this will definitely enhance tail winds to our business, I believe the larger tail wind will come if we appreciate the need to change our saving and investing culture.Finally, I would like the government to focus on boosting economic growth and on engaging the opposition to push forward with reform. One may be a participant belonging to any industry but eventually we are all stake holders in the same economy. If the Indian economy grows faster there will be multiple tailwinds to every sector. Hence, I hope that we see a reformist Union Budget 2016. Reform doesn’t have to always be “Big Bang” in nature but if investors can see some material actions, India will clearly be the most preferred investment destination on the globe. The current global context affords us an opportunity never to be missed.