After taking charge, the new Finance Minister P Chidambaram is attempting to restore investor confidence and has said that the government will unveil a slew of measures in the next few weeks to attract more people to invest in mutual funds, insurance policies and other well-designed instruments.
Mutual fund is one of the worst affected asset classes due to the recent turmoil in the global markets and its impact on domestic equity markets. The average asset under management (AUM) of the mutual fund industry has been falling continuously in the last two years, slumping to Rs 6,64,824 crore at the end of March 2012.
The FM said 'both the mutual funds industry and insurance sectors have turned sluggish. In the next few weeks, we will announce a number of decisions to attract more people to invest in mutual funds, insurance policies and other well-designed instruments.'
Mutual fund industry's plan to launch pension products to attract retirement money has got delayed due to taxation and other regulatory hurdles.
Chidambaram also said that the government had set up a panel to map out a plan to rein in the fiscal shortfall. The deficit for the first quarter of the current fiscal year that began in April has already crossed one-third of the full-year target.