FinMin may notify new equity scheme this week

Tags: News
The finance ministry is likely to notify the Rajiv Gandhi Equity Savings Scheme (RGESS), which is aimed at attracting retail investors to equity, within this week.

The revenue department is likely to notify RGESS by Friday this week, a senior finance ministry official said.

Finance minister P Chidambaram had already approved the scheme on September 21. He had indicated the revenue department would notify the scheme shortly and the Securities and Exchange Board of India (Sebi) would issue relevant circulars.

The scheme, which was announced in this year’s budget by the former finance minister Pranab Mukherjee, would provide a 50 per cent tax deduction on investments up to Rs 50,000 to investors whose annual taxable income is below Rs 10 lakh.

These investors can put in money through mutual funds and exchange traded funds and the investments would be locked-in for a total of three years.

The scheme would cover stocks listed under BSE 100, CNX 100 and Navratna, Maharatna and Miniratna public sector firms.

Investors will also be allowed to invest in follow-on-public offer (FPO) of such PSUs and initial public offering (IPO) of PSUs, with turnover more than Rs 4,000 crore, a move which is expected to give a push to the government's disinvestment drive.

The centre aims to raise Rs 30,000 crore from stake sale in PSUs in the current fiscal. However, with seven months already over, no company has yet hit the market.

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