The government has made public holding of at least 25% compulsory for publicly listed companies. Companies will be allowed to sell 5% equity every year until they reach 25%. On the surface it appears to be a good move. It will suck out between Rs. 1.6 to 2.1 trillion from the economy and may reduce inflation by reducing money supply. Since the money will be going to corporate coffers it will be better than increasing interest rates which may hamper growth. The government will be able to raise a lot of money by selling off shares in profitable public sector companies but by cleverly including the private sector it is trying to defuse union anger. This may stimulate more investment in the share market by retail investors and by broadening the base will, hopefully, reduce volatility and market rigging. However the people do not trust the market after having been repeatedly cheated. Ketan Parekh, Harshad Mehta and Ramalinga Raju are not the only villains to have robbed the public. There have been many ponzi schemes such as teak farms, gold coins, and schemes paying 25% interest. Builders regularly con people out of millions by collecting booking amounts on properties which do not exist. Buying a public sector company is risky as the government may allow it to accumulate debt while collecting taxes as it has done with oil companies. With Swiss banks proposing a withholding tax on money deposited there this may be a golden opportunity to repatriate some of the black money through the PN route. Politicians in India are not public servants but feudal bandits who want to hang on to power every which way. Wonder what they are hiding from us?