The
regulatory environment for Mutual Funds in India has evolved
over the years and today there is a very comprehensive regulatory
framework governing the Mutual Fund industry.
The
regulatory environment for mutual funds in India has evolved
over the years and today, there is a very comprehensive regulatory
framework governing the mutual fund industry. This framework
ensures that the interest of investors, especially retail
investors, is protected and there is complete disclosure and
transparency in every aspect of mutual funds' functioning.
The regulation ensures that every mutual fund has an effective
risk management system so that systemic risks are controlled.
In fact, some of our regulations are far ahead of many of
the more mature markets. The regulations in terms of uniform
cut-off time for subscriptions and redemptions, minimum number
of investors in each scheme, the regulation ensuring that
there is no concentration of holding in a scheme, certification
requirements for distributors and mutual fund employees are
some of the important regulations that have been introduced
in the recent past to protect investor interests.
The
Budget 2005 is very forward looking and will speed up the
pace of economic growth in the country. The budget did not
throw up any major surprises and clearly set its sights on
moving the reform process ahead quickly. The budget managed
to keep the fiscal deficit in check at 4.3% of GDP while attempting
to meet the commitments of the government under its common
minimum program. The budget seeks to implement ambitious programs
in the areas of agricultural infrastructure, water resources
management, rural credit and microfinance. The budget also
lays down a road map for infrastructure development in the
areas of telecommunications, highways, rural electrification
etc.
A
completely new regime has been ushered in on the tax front.
VAT has been implemented from April 1, 2005. By reducing the
maximum corporate tax rate to 30%, the effective tax paid
by domestic companies in this slab will reduce and this should
improve corporate profitability. On the indirect tax front,
there has been a lot of rationalization that has been carried
out. Peak customs duty on non-agricultural items has been
reduced from 20% to 15%. Custom duties on crude petroleum
has been reduced from 10% to 5% and LPG and kerosene now have
no custom duty. Service providers with a gross income of less
than Rs. 4 lakh are now exempt from service tax. All these
will spur investment and growth in the economy. |
