To encourage flow of savings in financial instruments and improve the depth of domestic capital market a new scheme called Rajiv Gandhi Equity Savings Scheme is being introduced. The scheme would allow for income tax deduction of 50 per cent to new retail investors, who invest up to Rs 50,000 directly in equities. However, this benefit will be available to only those whose annual income is below Rs 10 lakh.
The Government has also taken several steps to boost the domestic investment climate that has remained subdued in the recent past. These include allowing Qualified Foreign Investors (QFIs) to access Indian Corporate Bond market, providing opportunities for wider shareholder participation in important decisions of the companies through electronic voting, simplifying the process of issuing Initial Public Offers (IPOs) etc., Henceforth it will be mandatory for all companies to issue IPOs of Rs 10 crore and above in electronic form only.
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