Few people can disagree that the mutual fund industry in India is preventing a dramatic collapse in share prices. Foreigners have dumped Indian shares relentlessly in 2026. Most of the supply of shares was absorbed by the domestic institutional investors. Your saving and investing habits are helping protect Indian equity markets from a potentially vicious selloff. The appeal of major tech companies like Nvidia and Apple, and chip makers in Korea, Taiwan and China, is drawing foreigners away. That is reflected in the significant underperformance of the Nifty 50 compared with the Korean and Taiwanese benchmark indices this year.
A new Securities and Exchange Board of India consultation paper published last week proposes to strengthen the wall of your money by letting your employer deduct money from your salary every month into mutual fund schemes of your choice. That is a significant step towards nudging you to invest more through an automated process. It is similar to the way money is deducted from your account and deposited into your provident fund account.
Sebi seems enthused by the shift in household allocation away from physical assets like real estate and gold towards financial assets like equity, debt, and other asset classes, either directly or through mutual funds.
In another working paper published last week, the amount of household contribution towards financial assets was revised upwards to Rs 6.91 lakh crore for the financial year ended 2024-25. It is more than the earlier estimate of Rs 5.43 lakh crore. The revised figure used actual data from depositories, stock exchanges, and the Association of Mutual Funds in India (AMFI).
It now captures secondary market transactions when you buy or sell shares on the NSE or the BSE, preferential equity allotments, private debt placements, and newer instruments like REITs and InvITs. It also, for the first time, includes savings by Non-Profit Institutions Serving Households — trusts, NGOs, societies — as part of the household sector.
We now have a sense of the wall of household savings that is protecting Indian equity markets. According to Sebi’s working paper, household wealth in the securities markets stood at Rs 141 lakh crore as of March 2025. Equity holdings are close to Rs 90 lakh crore, or nearly $1 trillion.
Sebi’s initiative requires further boost from the government. If the salaried agree to use the automated method for channelling their personal investments in a structured way, the government can offer incentives to encourage this approach. It is a recognition of the role your savings play in nation-building by providing capital for growth. The government needs this more than you do, as stable avenues of capital are crucial to a fast-growing economy like India’s.
The other aspect of the consultation paper is that you can automate mutual fund investments to benefit your favourite charity. Household equity assets have jumped significantly, creating wealth for a few people. Even today, only 5% of people benefit directly or indirectly from equity assets. If those who have accumulated career or generational wealth have a transparent avenue to do good, there is no reason to redistribute it to those in need.
Sebi’s plan makes financial planning simple for you. As a salaried individual, you need to identify mutual fund schemes that suit you with the help of a professional advisor. You do not have to stress much about long-term savings. Before you enable the automated investments, you may want to ensure that you have enough money for an emergency fund. There is no lock-in talked about in this proposal. If you are saving Rs 10,000 every month through this process, you can allocate the amount for systematic investments through mutual funds based on your risk appetite. With this move, Sebi is nudging your hard-earned money toward serious wealth.