Centre to states: boost investor cult
Worried about the lack of interest among retail investors to participate in stock markets, the government has written to states to take steps to reverse the trend.delhi Updated: Nov 28, 2011 22:32 IST
Worried about the lack of interest among retail investors to participate in stock markets, the government has written to states to take steps to reverse the trend.
In a letter to the state chief ministers, corporate affairs minister M Veerappa Moily has sought their “personal attention” to ensure that investment awareness programme aimed at the common man turns into a success story.
Moily in his letter said that limited retail participation in the stock market is a cause for concern. “For the faster growth of the economy, the situation needs to be remedied,” he said in his letter. “This requires an effective outreach initiative to the common people, where they can be educated as well as encouraged to take informed investment decisions in the corporate economy in order to get higher return.”
At present, less than 2% of the total household savings is directed towards the stock market while about 12% is spent on weddings, social ceremonies and unusual medical expenses. Indians like to stock up on cash with a meager 3 % of the household income going into small savings instruments, stocks or insurance policies, altogether.
The ministry of corporate affairs has already said that it would be looking at several ways to ensure that the retail investor is protected especially in the wake of the rising volatility. The government is also keen to deepen the capital market while boosting retail participation.
The ministry is also planning to launch these programmes in regional languages. The government is also maintaining a national registry of economic offenders, offering Internet-based investor grievance redressal mechanism for the retail participants.
In the last two years, about 12,000 complaints have been filed and about 70% of the complaints have been resolved, a senior official of the ministry said.