Finance Minister Palaniappan Chidambaram urged officials on Tuesday not to hound the country’s taxpayers. An investor backlash forced the government in May to defer until 2013 implementation of a set of general anti-avoidance rules (GAAR) that were introduced in the annual budget in February.

Finance ministry urged pension and insurance funds, including the Employees’ Provident Fund Organisation (EPFO) to review and enhance their exposure to equity markets. The finance ministry meeting discussed that insurance companies and pension funds should use the full equity investment window while the risk averse EPFO, with a Rs 5 lakh crore corpus, should also consider investing in the capital market.

When the world’s biggest economies of the US and Europe are feeling the recession, because of the Euro Crisis, that was due to misconception and lack of understanding by European authorities. The European authorities where wrong fiscal problem rather than a banking problem and problem of competitive ness and apply wrong remedy.

Stock markets of the world have plunged. The world markets after the financial conflagration and noticed that India being one of the strongest emerging economies has a very weak form of stock market. It’s totally driven by the sentiments or the domestic base is minimal. The Finance ministry urging investors to invest in the capital markets.

Indian investors need a huge amount of awareness. Financial literacy has to be made as one of the national mission, people in India have huge savings but they are not aware of the market, financial inclusion is a way ahead. The Fundamentals of Indian economy is very sound and India is well-regulated. Only 2% of India’s population invests the stock market and out of them 1% are frequent investors. The free fall of sensex from 19000 to 11000 in a very less period dictates the whole story. And now in range bound.

If Indian domestic investor can be increased to 10% the sensex will automatically gain stability and there will not be the need for relaxing our rules compromising in FII which provides liquidity to our stock market.

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