To attract common investors into the equity market, Finance Minister Arun Jaitley will have to come out with a new policy.

The recently released survey by the National Sample Survey Organisation (NSSO) reveals that the common man has little trust in the equity market. It showed that equity account for just 0.07 per cent of total assets owned by rural households. The situation is only slightly better in urban areas at 0.17 per cent.

Jaitley has asked SEBI to focus more on retail investors. But to do this, the Centre has to rework its policy.

The survey was conducted in January-December last year and covered over 4,500 villages and 3,500 urban blocks – 14 households in each sample village and urban block were surveyed.

The survey shows that not just shares, but the overall contribution of financial assets is minimal in the total assets held by each household. For rural households, the share of financial assets is just 2 per cent, while it is 5 per cent for their urban counterparts.

Besides equity shares, financial assets include Government deposits, National Savings Certificates, Kisan Vikas Patra, Post Office Deposits, other small saving schemes and deposits with banks and NBFCs.

Demat accounts too reflect

Demat accounts-related data provided by the National Securities Depository (NSDL) and the Central Depository Services (CDSL) also echo NSSO’s findings. As on November 30, NSDL has over 1.35 crore accounts and CDSL 92.61 lakh.

However, the share of financial assets would have been higher had gold bullion and ornaments been included. The World Gold Council estimates indicate around 22,000 tonnes of gold lying with Indian households.

Disparity

The survey found that total assets in a rural household (cultivator and non-cultivator combined) comprise 72 per cent land, 21 per cent building, 2 per cent livestock and poultry and 3 per cent equipment. In an urban household (self-employed or others), land comprises 47 per cent, buildings 45 per cent and equipment (including transport) 3 per cent of assets.

The survey also found disparity between different households. It said that the lowest 10 per cent rural households (in terms of total assets) had an average asset value of ₹25,071 as against ₹291 in urban areas. This implied that the poorest urban population (in terms of assets) owned very little assets (as durables are not considered physical asset).

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