JM Financial AMC's Pandya highlighted that tax exemptions on mutual fund investments could enhance returns for investors amid current market volatility. However, he emphasized currency stability remains crucial for sustained growth. With foreign investor outflows exceeding $10 billion in recent months and rupee declining against dollar, fund managers stress need for policy measures addressing both fiscal incentives and macroeconomic stability to maintain investor confidence in Indian markets.

JM Financial AMC's perspective reflects broader concerns facing Indian asset management industry during current market turbulence. As foreign institutional investors withdraw funds due to geopolitical tensions and global monetary tightening, domestic mutual fund industry seeks policy support through tax rationalization. The currency stability concern stems from rupee's depreciation impacting foreign investor sentiment and portfolio returns. Tax exemptions on mutual fund investments, particularly ELSS and equity funds, could incentivize domestic savings channeling into capital markets, reducing dependence on volatile foreign flows. However, currency weakness erodes foreign investor returns in dollar terms, making tax benefits insufficient without broader macroeconomic stability. This highlights the dual challenge for SEBI and government - creating attractive investment environment through fiscal measures while maintaining currency confidence through monetary policy coordination. The statement underscores how asset management companies view policy framework as critical for industry growth, balancing investor returns with systemic stability concerns that affect market depth and liquidity.