Specials

Government should address the long-pending insurance bill: Sanjay Tripathy

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/smartcrop_800x800/public/images/event-coverage/2014/07/08/sanjaytripathy.JPG?itok=jTPcWZte

Life insurance is one of the most important segments of the financial services industry and has contributed immensely to boost various sectors in the economy through its ability to make long term investments, and provide huge employment opportunities. Currently the sector is reeling under tough economic environment and regulatory changes that have been instituted in last couple of years. The industry needs support from the government of India, to help it in further contributing to nation building in the coming years.

As an immediate step, the new government should address the following to boost growth in the life insurance industry:

1. Re-looking at the current investment limits for tax rebates and certain current tax provisions would augur well for the industry. Life insurance is a socio economic instrument. In absence of any strong social security system by the government, at least the investment in life insurance premiums should be given additional limit of at least Rs 1 lakh, instead of clubbing the same with other investments u/s 80C of the Income tax Act, 1961. This will inculcate the habit of systematic and consistent long-term savings among retail investors. The present limit of Rs 1 lakh has not been increased in the past several years.

2. To encourage customers to meet their retirement needs, investment in pension premium should be given separate deduction. Currently, such investments are clubbed with 80C investments. Annuity has been an unpopular investment choice because of its tax disadvantage. The maturity proceeds from Annuity are currently fully taxable as income, which effectively means that income is taxed twice.

3. The current limit of Rs 15,000 in health insurance must be enhanced to at least Rs 50,000. Currently an individual gets a deduction of Rs 15,000 for health insurance premiums paid (apart from a similar deduction on premiums paid on the lives of their parents).

Growing inflation has increased the cost of medical treatment. This has made it necessary for health insurance to be taken by every individual. In order to help the common man in meeting increased medical costs, offering more tax incentives would help in promoting health insurance.

4. The service tax charged to insurance companies has been increased to 12 per cent from the existing 10 per cent and the rate on life insurance policies where entire premium is not toward risk cover increased to 3 per cent for the first year and maintained at 1.5 per cent for subsequent years. At the same time mutual funds are exempted from such tax.

Overall, the change in tax has rendered life insurance at a position of disadvantage vis-a-vis MFs, PPFs, NPS, etc. Revisiting these changes will definitely provide the necessary impetus to help attract funds into long term savings and protection products offered by the life insurance industry.

5. Armed with an absolute majority, the new government is expected to address the long pending insurance bill, which looks to raise the foreign direct investment (FDI) cap in the sector from the current 26 per cent to 49 per cent. FDI relaxation would encourage long-term fund inflow that would both encourage the growth of insurance in India as well as provide the government with access to funds to aid infrastructure growth.

Moreover, insurance industry has seen negative job creation as number of agents and employees have been on the wane. FDI would get in greater investments into the sector and make it an attractive proposition for good talent.

We also expect clarity to emerge on the road map of DTC and GST. This would help the industry better plan in the implementation of the new regulations.

 (These are purely personal views of HDFC Life senior executive vice president marketing product, digital & e-commerce Sanjay Tripathy and indiantelevision.com does not subscribe to these views.)

Latest Reads

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/11/Inside-Digital-India%20%281%29.jpg?itok=CnwOsdre
Rs 12 billion budgeted for 'Digital India' '17-18

With the Government’s emphasis on cashless and paper-less working, electronic governance gets the highest chunk of Rs 4.0055 billion out of the overall budget of Rs 12.1642 billion set aside for Digital India for 2017-18.

Specials Budget Budget 2017
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/10/Ravi-Shankar-Prasad%20%281%29.jpg?itok=Xf9axe3G
Ravi Shankar too hopes DTH will support Swayam

Union Minister of Electronics & Information Technology and Law & Justice Ravi Shankar Prasad said, “The budget of Modi government for 2017-18 is historic and unprecedented. This is a budget for bold India, clean India, eager to tap its potential. Based on the pillars of efficiency,...

Specials Budget Budget 2017
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/08/deep-sengupta%20%281%29.jpg?itok=tSmYMgrN
Budget '17: SAP enables mid-sized cos to go digital

Aligning to the Union Budget 2017, SAP SE announced the launch of SAP S/4HANA Private Cloud, the next generation business suite tailored for midsize companies, which will be available at a simple and affordable subscription pricing.

Specials Budget Budget 2017
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/07/Untitled-1_1.jpg?itok=GUdW5mAy
Budget '17: Rural net will facilitate travel bookings

The union budget has broadly focused on themes such as the farming sector, the tourism industry, development of road network, and infrastructure. The high speed internet connectivity in rural areas will now be the biggest advantage to the travellers.

Specials Budget Budget 2017
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/07/Nippon%20TV-800x800.jpg?itok=mQBFe8uo
MIP '17: Nippon TV gears up with two scripted, three non-scripted formats

MUMBAI: Having recently been crowned ratings champion for the third consecutive year in Japan, coupled with the tremendous success of its scripted drama Mother which has received numerous offers from around the world and is a ratings success in Turkey as ANNE, Nippon Television Network Corporation...

Specials Event Coverage Miptv
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/03/Untitled-1_0.jpg?itok=xexBn2BM
Budget '17 initiatives will drive overall demand, believe startups

Startups are in a celebratory mode after the presentation of the Union Budget 2017 by the finance minister Arun Jaitley. He announced that small businesses with an annual turnover of Rs 50 crore will now have to pay five per cent less income tax, in order to make micro, small and medium enterprises...

Specials Budget Budget 2017
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/03/BUDGET02%20%281%29.jpg?itok=7R6eUsBF
Top M&E industry honchos see no major benefit from Budget '17

MUMBAI: With the Union Budget’s focus on rural and infrastructure sectors, the media and entertainment (M&E) industry seems to be disappointed as the budget does not offer much. Though the sector is hoping to get some benefit through the digital push mentioned in the budget, expectations were...

Specials Budget Budget 2017
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/02/INSIDE%20%281%29.jpg?itok=2a1xE-59
Budget '17: Leading digital players hail sectoral boost

“Digital economy helps in cleaning up the system, has transformational impact, energises private investment through low-cost credit, and benefits the common man,” asserted finance minister Arun Jaitley while announcing the Union Budget 2017 on 1 February. The budget 2017 emphasised a lot on the...

Specials Budget Budget 2017
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/02/prasar%20bharati-800x800.jpg?itok=K9OEduaZ
Budget '17: Prasar Bharati grant-in-aid down, film sector's aid up

NEW DELHI: The grant-in-aid for Prasar Bharati has come down marginally from the revised estimates from Rs 4500 million in 2016-17 to Rs 4300 million for 2017-18. This includes a grants-in-aid to the pubcaster of Rs 3500 million and a separate grant-in-aid to it for the Kisan Channel of Rs 800...

Specials Budget Budget 2017

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories