The Hindu Business Line : Chidambaram wants household savers to become retail investors

TIME TO SAVE AND INVEST: The Finance Minister, Mr P. Chidambaram, flanked by the Minister for Communications and IT, Mr Dayanidhi Maran, and the CMD of UTI Asset Management Company, Mr M. Damodaran, at a function for signing the memorandum of agreement between IndiaPost and UTI MF in the Capital on Tuesday. - Kamal Narang

New Delhi , Sept. 14

THE Union Finance Minister, Mr P. Chidambaram, today underscored the need for more innovative practices on the lines of the tie-up between the Department of Posts and the UTI Mutual Fund to transform a large section of household savers in the country into retail investors.

Speaking at a function organised for the signing of the Memorandum of Agreement between IndiaPost and the UTI Asset Management Company Pvt Ltd, Mr Chidambaram admitted that the capital markets, which have been on a "roller-coaster" ride, have had their share of scams that had hurt more retail investors than rewarding them.

He hoped that the confidence of retail investors in the capital market would increase, as the regulations get stronger in the light of the various incidents (especially scams) that had impacted the functioning of the markets in the past.

"We must get rid of the fear of capital markets. As Government, we are willing to encourage every arrangement (like the one between UTI Mutual Fund and Department of Posts) that would help convert the savers into retail investors," Mr Chidambaram said.

He also highlighted that household savings played an important role in encouraging investments and enabling growth of the economy.

The Finance Minister favoured mutual funds as a better investment vehicle for households than parking funds in savings accounts or current accounts or even fixed deposits.

On the Department of Posts, the Finance Minister said that image is a big challenge and there is a long way to go for the department in this regard.

He pointed out that most Indians view the postal department as a "boring department".

"Frankly, I wish the other departments of the Government too become like the Department of Posts. The Department of Posts is the only department that delivers what it intends to in 99 per cent of the cases," he said, complimenting the department for its ability to deliver services across the country.

The Finance Minister also hoped that the Department of Posts (IndiaPost) would some day become a "giant" in some specialised products.

He highlighted that DHL, the second largest courier company in the world, is owned by the German postal department.

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