The finance minister on Thursday approved the Rajiv Gandhi Equity Savings Scheme, a tax-happy investment scheme aimed at first-time equity investors. Earlier restricted to direct stocks, the scheme will now be extended to listed mutual funds and exchange-traded funds (ETFs) other than large-cap stocks that invest in either the BSE-100, the CNX 100 or stocks of specified public sector units (PSUs).
Last week, the disinvestment department invited applications for advisers to help the government draft the rules for PSU disinvestments through the ETF route. The PSU disinvestments, it is planned, will happen using ETFs aimed at retail investors. Read the two together and the intention of this tax break is clear—introduce safer equity through the mutual fund route to a new class of investors, and help the government sell the family silver to plug the leaking budget.
