Our institutions have, for the most part, failed us. LIC is the biggest receiver of savings as a public insurer, and yet, it puts very little of its money into the non-government economy. As of September 2014, nearly 10 lakh crore out of the 15 lakh crore of policy holders’ money with LIC was in Government securities. (Some of this is by regulation, but a very large portion, by choice). Of the rest, much is invested in buying stakes in public sector enterprises, in equity and debt. Further, LIC works hard to backstop public sector disinvestment. Banks are similar – they don’t even want to lend to SMEs, for the most part. Indians don’t (for the most part) invest in venture funds or private equity, at least not directly. Our EPFO doesn’t want to invest even in listed equities – and that’s a big source of pensions. And it seems our institutions also don’t bother to invest in them either.… (Read On…)
[via Capital Mind]
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