India's savers now smarter, better-informed to seek higher returns, says FM Sitharaman

People have become smarter and better-informed to maximise return on their investments, FM Sitharaman said in Rajya Sabha.

India's middle class is getting smart when it comes to their savings, and are diversifying their portfolios for better returns, Finance Minister Nirmala Sitharaman said in the Rajya Sabha on August 8, responding to the Finance Bill discussion.

"Individuals may not be sitting in post office or going for a fixed deposits, they are finding portfolios with better returns. They are also investing in property," FM Sitharaman said.

Underscoring the growing culture of equity investment, FM Sitharaman said household savers are seeking better returns than what the traditional avenues had been offering. "Today, small savings are alone not the portfolio anymore, people are finding different portfolios for better returns," she added.

People have become smarter and better-informed to maximise return on their investments, FM Sitharaman added.

"When we were talking about rationalising capital gains tax, many questioned us on bringing a small increase in the future and options segment, and people told me to my surprise such investments were being done by the middle class. You usually expect people with higher disposable income to trade in future and options, but people have become smarter and are better-informed to put money there and get returns for them."

The diversification is taking the common savers to diversify into real estate too. "People are looking at turning their savings into investments in properties as well as in portfolios with better returns," FM Sitharaman added.

FM also underscored that the government has made efforts to reduce the 'tax burden on middle class substantially', especially at a time when many developed economies increased tax rates.

FM called the step to amend the Finance Bill and bring back an option for indexation benefit as a 'progressive approach' in dealing with the feedback. "By giving an option, we have ensured no one faces additional tax burden due to this change," she added.