Battling emus and gold, govt wants people to buy shares
The recently introduced Rajiv Gandhi Equity Savings Scheme (RGESS) offers investors earning less than R1 million a year a 50% tax break on stock investments of up to R50,000. Kashinath, though, thinks the plan has as much chance of flying as the Australian birds he bought into.
“I can't even read or write. How do you expect me to buy stocks that I don't understand? My money is stuck, but once I get it back, I'll open a bank account to keep it safe,” he said.
The ambitious scheme, which aims to broaden share ownership, re-energise an unprofitable mutual fund industry and bring some structure to a patchy investment landscape, faces formidable barriers — not least India's love affair with gold. India has one of the world's highest savings rates, at over 30% — more than double the US — and the bulk of the nation's $800 billion in savings is parked in gold.
India is the world's biggest gold buyer and holds $1 trillion worth of the precious metal, World Gold Council data show — more than the combined military spending by the US, China, Russia and Great Britain.
“Gold holds an emotional charm for most Indians. Those are some
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