Thread by @IamMisterBond

#Budget2022 wish list:

Congratulations to @nsitharaman and @PMOIndia to guide our country thru this #pandemic period. You have avoided excesses of many countries during this period. Thanks to that #India is touted as the next preferred #investment destination.

It is dream of our Hon #PMModi to reach $5 trln economy very soon. For that, besides Govt spending, you will need help from citizens to save, invest and channel the same to productive use through investment vehicles like Mutual Funds.

Our #MutualFund Industry has grown from 25 lac crs to currently 37 lac crs and likely to touch 100 lac crs.

#MF mobilizes #savings of all #Investors - #retail, #HNI, #Institutional and helps in growing our economy by participating in #Debt and #Equity - key drivers for growth

For MF AUM to grow from 37 to 100 lac crs, you will need active participation of all channels for mobilization- intermediaries like #MFDs, #RIAs, #DIY Investors, #Banking and other such channels.

Need to encourage & activate all the channels - but not one at the cost of others

So far since 1995 Mutual Fund Distriburors (MFDs) have a done a great job by popularizing MF as a preferred vehicle of #investments.

They have provided their heart, soul, sweat, time, money energy to provide service to the industry and their investors.

In the earlier #ServiceTax regime, first they were charged this tax for providing service to their Investors. Same was exempted in between but brought back at higher level & now charged 18% #GST on their income earned from commissions for providing service to their investors

This GST is not recoverable from end beneficiaries viz. Investors. They are only earning Rs.82 (against income earned of Rs.100).

On top of that margins have been squeezed in this industry by lowering expense ratios etc.

In all other industries, be it #Manfacturing or #Service (including #Insurance), GST is recovered from end beneficiaries of goods & services.

MF Industry is the only industry where #MFDs are not able to recover this inspite of providing service & taking a hit on their income

If we wish to achieve milestone of touching 100 lac cr AUM for MF Industry, we will need more foot soldiers than less. Even if we compare total number of regd Advisors, it is mere 1 lac + vs 25 lac + in Insurance.

Only 20-30,000 are active MFDs from this number of 1 lac.

Many hurdles including GST, squeezed margins, regulatory changes etc. - active number of MFDs is dwindling.

Intention should be to have more penetration even at the remotest parts of country & that is possible by encouraging this Channel which has contributed max in MF growth

@nsitharaman @PMOIndia we need to encourage MFDs who are doing a very honest & sincere work by removing #GST in this #Budget2022 on their commissions

Ensure more MFDs register, earn reasonable income for their services & not get marginalized due to regulatory & such tax issues

Ensuring more participation by MFDs - not only will MF Industry corpus grow, but the same funds will get utilized in development of our economy thru Debt & Equity. Savings will be channeled into productive direction to help grow #GDP.

GST contribution from commissions on Mutual Fund Investments is actually a negligible contributor to the exchequer. But removing these hurdles by removing GST, adding more MFDs to become active in this business can only help economic growth and GDP growth of our country

Humble request to @nsitharaman and @PMOIndia to consider removing GST on commissions earned by MFDs.

Trade off between GDP growth and not charging GST on commissions is hugely in favour of former by encouraging more MFDs to become active & reach $5 trln economy

@NileshShah68
@MFBALA
@iRadhikaGupta @mohanty_swarup @AashishPS
@invest_mutual
@npparikh6
@MubinaKapasi
@KalpenParekh
@_nirajshah
@LarissaFernand
@vikaasmsachdeva
@gajendrakothari
@akhilchat
@GR_2608
@ashishchauhan
@pvsubramanyam
@Datta_karan
@amfiindia