The Economic Survey has called for increasing the participation of retail investors in the mutual fund industry while stating that there is scope for expansion of the industry from the present levels.
The report has pointed out that in 2007-08 only 7.7 per cent of the country's total savings was allocated to mutual funds, thus leaving scope for growth of the industry.
Besides, it also said that the retail participation in mutual funds, which stands at 15 per cent at present, is expected to increase in the years to come as availability of products and investor education improve and the industry takes steps towards transparency and sound corporate governance practices to generate investor confidence.
The report has specially mentioned the turnaround witnessed in the performance of mutual fund industry, which had remained subdued in 2008. The report said mutual fund investments (net) in equity markets turned positive in March 2009 and were Rs 2,320 crore during April-May 2009, while they invested Rs 36,791 crore in debt instruments during the same period.
Mutual fund penetration in India is just around 3 per cent and there indeed is a lot of scope to improve that figure.