SEBI allows mutual funds with active ELSS to launch passive schemes The Securities and Exchange Board of India has allowed mutual funds having existing active equity-linked savings schemes (ELSS) to launch passive ELSS schemes, provided fresh flows to such existing active schemes are halted. Earlier, asset managers could launch either active or passive ELSS schemes. Passive ELSS will be cheaper, with lower expense ratio of 10-25 bps compared to active schemes which charge over 1%. A lower expense ratio can help investors get higher returns, especially over a longer term of 10-15 years, according to experts. An ELSS must invest at least 80% of its assets in equity and equity-related instruments. The assets under management (AUM) of the ELSS category stood at over Rs 1.5 trillion as on December 31, 2022. In December, IIFL Mutual Fund announced the new fund offer for India’s first tax saver index fund, IIFL ELSS Nifty 50 Tax Saver Index Fund’ benchmarked on Nifty50 index. “Taking exposure to the Nifty companies through a passive fund is an opportunity for investors to harness the growth potential of equities, reduce tax outgo, lower the cost of investing, and gain diversified exposure,” said Parijat Garg, Fund Manager, IIFL AMC. In a circular last year, the regulator allowed MF houses to introduce passive ELSS schemes from July 1, 2022. The passive ELSS scheme shall be based on one of the indices comprising of equity shares from top 250 companies in terms of market capitalisation. Fund houses stopping fresh flows in existing active schemes have to give an option to investors to redeem units without exit load, subject to lock-in requirements.
Retail inflation in milk was reported at 8.85% in May 2023. The milk inflation has remained elevated at over 6% since August 2022. Despite India being the largest milk producer since 1998, the commodity has been the second biggest factor after cereals such as rice and wheat in driving up retail inflation in the last fiscal.
Milk has the second highest weight in the food and beverages basket of the consumer price index at 6.61%, a notch lower than cereals and products with a 9.67% weight. Organised players, including Mother Dairy and Amul, hiked prices multiple times in the last one year citing higher fodder cost, robust demand and some impact due to reports of lumpy skin disease.
Industry sources said feed cost, which has a share of more than 65% in the cost of production of milk, has increased to Rs 20/kg from Rs 8 a year ago. The finance ministry in April had attributed the elevated milk inflation to a demand supply mismatch and said it could be one of the factors apart from volatile international crude oil prices and constrained supplies of milk would influence the country’s inflation trajectory.
“Milk production has been impacted by a lumpy skin disease infecting millions of cattle in late 2022,” the ministry said in the monthly economic review, adding that the vaccination drive against the disease is expected to curb the spread and immune the cattle against the skin disease.
According to official data, currently India is the world’s largest milk producer, and has a share of 23% in global milk production. For the first time in decades, the country’s milk production is likely to have stagnated in 2022-23 due to Lumpy Skin Disease in cattle across several states and the lagged effect of Covid-19 in the form of stunting of the animals, a senior official with department of animal husbandry and dairying recently had stated. The milk production was estimated at 221 million tonne in 2021-22.