New Delhi, June 1: The Union finance minister's proposals to improve the primary market sentiments by giving tax concessions for public issue expenses are sure to be a damp squib. Even his claim that the move will induce corporates to hit the market more often may not come true. With the scare of poor investor response hanging like Damocles' sword over the issuers, few are expected to tap the public.Says a merchant banker, ``Cosmetic changes like tax concessions will yield little results and corporates will continue to shy away from tapping the public. The government has to address the real issue - of luring retail investors back -- if it wants to kick start the primary market. By failing to recognise this malaise, the finance minister has shown a short-sighetedness in resolving this crisis.''
``The budget only recognises the poor state of the primary market but has only addressed the issue by stating that the Sebi would be asked to study and recommend measures to improve the state,'' says Prithvi Haldeaof Prime.
Notes a Delhi-based broker, ``The government has just paid lip service to the problems of the primary market. Just saying that special efforts will be made to restore the confidence of small investors is not enough. We were expecting some bold measures from the Budget.''
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
