Where exactly is the Budget placed for market participants? Milind Barve, managing director, HDFC Asset Management Company, says it’s largely about underscoring the path for fiscal discipline. In an interview with Nitin Shrivastava and
Aswathy Varughese, he singles out past returns and earnings as the major trigger for retail investors skipping equity products. Edited excerpts:
What are market participants expecting from the Budget and what steps would improve investor perception?
We are witnessing record flows from FIIs on the back of various policy announcements by the government in the recent past. Global investors shall be keenly watching steps taken in the upcoming Budget to curtail fiscal deficit, other reform measures such as GST/GAAR and credible roadmap towards managing current account deficit. And the Budget should underline India’s path towards fiscal consolidation.
MF industry expectations?
The MF industry looks forward to promoting long-term savings in equity and debt products of mutual funds.
Response to RGESS so far? What more has to be done?
We welcome the new initiative of RGESS and would look forward to some relaxation which will provide tax benefits to a larger audience on a recurring basis.
What is stopping retail investors from putting money into equities?
Retail investors take decisions looking at past earnings. In the last few years, market returns have been soft. However, MF assets have grown steadily.
What’s your take on recent Sebi initiative to promote MFs outside top 15 cities?
I genuinely believe the new initiatives on B15 (beyond 15 cities), as we call it, are innovative and well-crafted. It hugely incentivises the distribution community in smaller cities. The incentive structure is quite attractive and created in a manner so that the overall additional cost to us, as a fund house or investors, is pretty low. We are seeing some uptick in new distributor registrations, increase in number of SIPs and general interest for MF products emerging though it could take some more time for it to be easily visible.