To know the investment in trading and mutual fund as a state government employee

What are KCSR rules? Can you give me some details about these rules?
A government employee can invest money in shares as well as mutual funds. There are no such restrictions as far as I know. I know many employees in the government sector doing trading and keeping their money in MF. If the money you are investing here should be a legally earned money and one should be able to show the source of money. If that is done any government employee can also invest in the MF and Trading. All the best to you.

As per CCS (Conduct) Rules, 1964 or AIS (Conduct) Rules, a Central Government employee (including teachers) can very well invest (buy and sell) in equities and in mutual funds. However, regular intra-day trading of huge amount is generally discouraged (but not banned).

All the State Governments Rules are more or less the same. So, an employee of State Government (of Kerala/Karnataka) can also invest in shares/equities and in mutual funds. Kerala/Karnataka Civil Services (KCSR) Rules would also be similar as indicated above.

There is no such restriction for the state Govt employees but the problem is you can not do it when you are on duty. So if you caught doing it while on duty it is wrong and action can be taken against you. The reason is very obvious that share market trading is a serious work and if you are doing it in office time you can not concentrate in your duties and either will not attend to the duties or do some grave mistakes and blunder.

Now the question comes if you can not do it in office time then how you have to do it. There is no problem in that account as many of the Govt employees are doing it and they do it by placing advance orders in the market by giving a limit or do it through an agent by giving limits or ask a family person to it under the guidance given and then in the evening you can check everything and then give a direction for the next day or next session of your investments.

So it is not difficult but requires to adhere to a strict discipline and not indulge in it during the duty hours.

Some people are working in odd hours like morning shift or evening shift. They are free in the remaining day time to do it.

There is no strict rule that an employee of a state - government cannot invest in the mutual - fund or equities. The fact is that our finance - minister made a comment in the budgetary- session in the year 2017 that employees should take advantage of the market condition by investing in the mutual funds and equities and this could be the indirect way for the market- revival in terms of shares. The result has been overwhelming since then.
However, the standing rule covering the employee discipline states that no state government employee should carry out any activity hampering his normal assignment entrusted to him by his employer. In that way, during the period of duty one is discouraged to take up such activities like investing in shares.
Once the duty is over, they can freely indulge in share - market activities.

Any one can invest his genuine and accounted income in any kind of investments allowed legally in this country. Once your income is from a proper and legally allowed source like your employment in government service, and if you are paying the eligible tax on that income and filing return if needed as per minimum eligibility then, your income is accounted and you can use the residual income in any permitted manner. Investing stock market, mutual funds etc are allowed.
Generally service regulations prohibit speculative trading of huge amounts and not genuine investments.
For government servants an additional clause is that they should not use their position of influence as government servant to affect or influence their activities and get undue benefits.

If there is a need to submit assets and liability statement to the employer, you have to show your investments in market in that statement. There may be requirement to give details on such investment if they are beyond certain amount. Then you may have to comply that also.

You can invest in stock market knowing the risks involved in such investments. You may sometimes need to invest in the eligible funds/equity linked savings schemes to save tax using the exemption limit.

The service rules may state that your other activities should not affect your normal duties expected.

Yes, You are allowed to Trade in either equity as well as mutual funds.
Because this is a Government regulated things as well as Government itself Promote to invest Indian Investor ( whether Govt employee, Pvt employee, House wives or unemployed) by giving Tax benefits by investing in specified Products.
In equity Investment it include high risk and high return by Investing in RGESS ( Rajiv Gandhi equity savings scheme) you can get Tax benefit upto 50,000
Similarily by Investing in mutual funds ( ELSS) schemes also you can get benefit for tax deduction.
It does not reduce your Tax payment from your Income as well as it will help in future savings as well as growth of your money.
Because by keeping money at your savings bank or Fixed deposit you get around 4-8% interest maximum, where as by investing in equity or mutual funds for long run you can earn 10-12% average some time it can give you 20-30% return also. But do not try to make a habit of regular trading because it will distract you from your official work.