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Modi’s ‘Make in India’ campaign to be supported by Domestic Mutual Funds

Posted by On December 19, 2014 0 Comment

MUMBAI:’Make in India’ campaign has inspired domestic mutual funds to launch schemes that would benefit from the proposed initiative. At least three mutual funds have launched or are coming out with schemes that will invest in companies in the manufacturing sector, which will
be the proxy for the theme.

ICICI Prudential Mutual Fund and Sundaram Mutual Fund have already announced close-end funds, while Birla Mutual Fund is likely tolaunch an open-end manufacturing fund in early January. Industry officials said others are likely to follow suit. Sundaram Mutual Fund (Sundaram Top 100 -Series 4) with a tenure of 36 months and ICICI Prudential Mutual Fund (ICICI Growth
Fund – Series 6) with a tenure of 42 months will build a portfolio of companies that will benefit from the ‘Make in India’ initiative, which is expected to play out over the next 2-3 years. Critics say funds are making the most of a popular theme to market their schemes, but fund houses argue there is more to it.

“Make in India aims to increase the share of manufacturing in GDP from 16 per cent to 25
per cent by 2022 and will create 100 million additional jobs. The manufacturing sector has multiplier effects that spill out even into allied sectors,” says Sunil Subramaniam, deputy CEO, Sundaram Mutual Fund.

The government’s presentation on the ‘Make in India’ theme said the domestic automobile market is estimated to become the third largest in the world by 2016 and will account for more than 5
per cent of global vehicle sales. Global companies are looking to make India their manufacturing hub. The government, in turn, will help by providing the necessary infrastructure and support in the form of roads, ports, railways and other logistics.

Various ministries from the government are taking efforts to improve India’s rank on the World
Bank’s ease of doing business list; India currently stands at 142 out of 189 countries on the list. All this is likely to help the Make in India initiative.

Source:Economictimes

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