New fund offers (NFO) are schemes launched by asset management companies to widen their portfolio by offering new categories of funds. These NFOs are open-ended products, meaning they reopen for subscription after the initial NFO period ends. It is essential for investors to only deal with SEBI registered mutual funds when considering NFO investments. Instead of subscribing to an NFO just because it is available at a par value of Rs10, investors should focus on building a long-term portfolio that aligns with their risk appetite and financial goals. Open-ended mutual fund schemes with a track record are preferable as investors can evaluate the portfolio and past performance for better decision-making.
Despite the growing electronic sector in India, which has significantly increased to $105 billion in 2022-23 from $29 billion in 2013-14, the country’s dependence on imported components has also risen. To address this issue and reduce the burden on foreign exchange resources, the government has allocated Rs400 billion for an electronic components manufacturing scheme. The private sector is expected to invest around Rs820 billion, leading to the production of components valued at Rs2 trillion domestically. By promoting domestic manufacturing, the goal is to decrease the import bill and increase self-sufficiency in the electronic sector.
In regards to tax matters, the income tax department in India is taking a more taxpayer-friendly approach. The Finance Minister’s emphasis on fairness and friendliness has encouraged almost 5.9 million first-time tax filers this year. Additionally, the new tax regime allows for tax rebates up to Rs700,000 of taxable income, with lower tax rates compared to the old regime. Tax officers are encouraged to promote voluntary compliance and avoid punitive measures unless necessary. Furthermore, efforts have been made to simplify communication with taxpayers and reduce legal jargon, aiming to create a better compliance environment and minimize unnecessary litigation.
When it comes to promoting tourism in India, the government is actively working to attract more foreign tourists and reduce stagnation caused by the global slowdown. Despite challenges, the government aims to increase tourism’s contribution to the GDP from 7.9% to 10% in the next five years. One initiative includes developing the Buddhist tourism circuit under a public-private partnership model to create new destinations that will attract inbound tourists. State governments are also playing a vital role in promoting tourism, as it not only boosts the economy but also leads to employment growth across different states.
Overall, investors interested in NFOs should consider factors beyond the par value, focusing on long-term goals, risk appetite, and the track record of existing mutual fund schemes. With the government’s efforts to boost domestic manufacturing in the electronic sector and promote tourism, India is aiming for self-sufficiency and growth in key industries. Furthermore, the tax department’s shift towards a more friendly and transparent approach is expected to improve compliance and reduce unnecessary litigation, creating a fairer environment for taxpayers. By addressing these aspects, India is moving towards a more investor-friendly, self-reliant, and tourism-promoting economy.
