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“Retail investors who find difficult to enter equity markets due to sharp upswings do not want any lock-in on their investments,” Assocham said in a report
Industry body Assocham called for reducing the lock-in period in the Rajiv Gandhi Equity Savings Scheme (RGESS) for new equity investors to six months, instead of three years as proposed in the Budget 2012-13.
"Retail investors who find difficult to enter equity markets due to sharp upswings do not want any lock-in on their investments. Thus, the three-year lock-in period under the Rajiv Gandhi Equity Scheme announced in the Budget needs to be reviewed and capped at six months," Assocham said in a report.
Further, the report said that the only way to attract and enlarge retail participation is to reserve at least 50% of PSU divestment at a discount of 5%-10% to market price.
This will bring some stability and depth in the market, it added.
On the auction method, it said, the mode has upset retailers as it puts big investors and corporates to advantage due to their capacity to quote higher price.
Less than 2% of people in India invest in capital markets as against 35% in the US, 15% in UK and China, and 12.5% in Germany.
"The time is ripe to roll out more stock exchanges and encourage setting up of trading platforms in existing stock exchanges in securities of small and medium enterprise," Assocham secretary general D S Rawat said.
Companies which are not listed at home should be allowed to raise equity abroad upon compliance of regulatory requirements in the destination countries, he said.