The Association of Mutual Funds in India wants the Finance Ministry to allow fund houses to introduce a mutual fund linked retirement plan on the lines suggested by the SEBI Board in February.

HN Sinor, Chief Executive Officer, AMFI, said: “The plan would not be an annuity and would invest 60 per cent in equities and 40 per cent in debt at the outset with the proportion of equities decreasing every year with the investor exiting at 55 years of age.”

Also on AMFI’s wish list is an increase in the limit of Section 80C of the Income Tax Act from ₹1 lakh to ₹2 lakh with mutual funds be earmarked ₹50,000 within the enhanced limit.

The association has asked for mutual fund schemes with a three-year lock-in as an avenue for investors to park their capital gains.

Tweak rebate on RGESS

AMFI has also asked the Centre to tweak the tax rebate in the Rajiv Gandhi Equity Savings Scheme.

Gross inflows into equity schemes (which includes equity funds, ELSS and balanced funds) in May touched ₹10,000 crore while the industry AUM clocked ₹10.11 lakh crore. Of this, ₹2.32 lakh crore is in equity and the remaining in debt.

Sundeep Sikka, Chairman, AMFI, said: “Retail participation in equity schemes has increased significantly in the recent months. Our effort to reach out to the retail segment and locations beyond Tier 2 and Tier 3 towns has started showing results.”

Both Sinor and Sikka attributed the rise in retail participation to an increase in systematic investment plans and a comeback of erstwhile mutual fund investors.

There has been a one percentage point increase in retail participation from beyond top-15 (B-15) towns with the industry seeing net inflows from these geographies since November (barring March).

The number of calls to call centres are increasing and so is demand for schemes from places such as Dharavi and Bhiwandi within the Mumbai metropolitan region.

Related Topics
comment COMMENT NOW