The Rajiv Gandhi Equity Savings Scheme (RGESS) is is convoluted and cumbersome, but the government looks likely to fix the problems for next year.

The last few weeks have been somewhat eventful for the Rajiv Gandhi Equity Savings Scheme. One, the scheme itself is well on its way

with a number of RGESS-specific mutual funds now available. Equity investments under the RGESS are also operational with some brokers actively canvassing for investors. Last week, the finance minister also participated in a function launching RGESS investments through the Bombay Stock Exchange (BSE) with the first clutch of investors being handed shiny RGESS certificates of some sort that they held up triumphantly while posing for photographs. While the RGESS is definitely a step forward, being the exclusively equity-oriented tax-saver in a long time, it is also clearly a work in progress.
The scheme is convoluted and riddled with needless complications.
One example: while you can invest in mutual funds under the scheme, you must do so through your dmat account, for some reason that has never been made clear.
Now, it so happens that of the three possible methods of fund investing - direct, distributor or dmat - the last is the most cumbersome and the least popular. But the RGESS makes it compulsory, as if the goal was to get people to open dmat accounts.


                                                                                                                                Amit gupta
                                                                                                                                 PGDM 2nd sem