One size fits nobody

There was a time, not so long ago, when the Income Tax Act specified that of the sum you could invest under Section 80C, only Rs 10,000 could be invested in tax-saving mutual funds. The rest had to go elsewhere – PPF, insurance, NSC, whatever. The government, in its wisdom, had decided that equity mutual funds were risky and citizens needed protection from their own enthusiasm. Never mind that ELSS funds had consistently outperformed the other options over any reasonable time horizon. The rule was the rule. That cap was eventually removed, and today you can allocate your entire 80C limit to ELSS if you wish. But the mindset that created that rule, the belief that regulators know best and must specify precisely what citizens should do with their money, was widespread. The history of Indian financial regulation is littered with prescriptive rules that assumed everyone's life looked the same. W