To bring in more retail investors into the stock markets, trading members' group has suggested listing of public sector enterprises like Indian Railways and Life Insurance Corporation (LIC) under the government's divestment programme.
The Association of National Exchanges Members of India (ANMI) has also pitched for making Aadhaar card a identity proof document for investors to trade in stock exchanges.
In a proposal to the government ahead of the Union Budget, ANMI said that disinvestment of public sector firms will provide more investment options in the capital market as well as attract more investors.
"Some of the large public sector enterprises like Indian Railways, LIC (Life Insurance Corporation), General Insurance companies and other profitable public sector enterprises should also be disinvested by the government," ANMI said.
"This will not only become an excellent source of revenue for the government but also provide more investment options for the retail investors. In fact, given the brand equity enjoyed by these enterprises, new retail investors will also be attracted towards investment in the capital markets," it added.
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ANMI has also suggested that the government make Aadhaar Card as proof of identity and bank account as proof of address for investors to trade in the stock markets against the current mandatory requirement of using a PAN card.
According to ANMI, implementation of such a proposal would enable all persons who have bank accounts to invest as an investor only require's Rs 10,000-12,000 to apply in an Initial Public Offer (IPO) or a Follow On Public Offer (FPO).
ANMI noted that as PAN requirement is mandatory for opening a securities account, an entire group of people having agricultural income, which incidentally constitutes 60 per cent of the employment in the country, is not eligible to trade in the capital markets.
"Similarly, given the tax exemptions, all those having a monthly income of Rs 20,000 do not need a PAN card and so will not be eligible to trade/invest," it said.
Among other steps proposed to expand and deepen the retail investor-base in country, ANMI said there was need to reduce the capital gains incidence on equity investments.
"The short term capital gains on equity investments which currently stand at 15 per cent should be reduced to 10 per cent," the association said among other suggestions.
Besides, investments in equity shares held for a period of 6 months and above should qualify for Long Term Capital Gains instead of 1 year at present, it added.
ANMI has proposed that such individuals be allowed to hold more than one Portfolio Investment Scheme account. Like resident, if NRI can hold multiple accounts (trading/DP) across brokers/ banks, it will help acquire new clients, the association noted.
ANMI is a pan India trade body for capital market intermediaries.