Insurance industry hails Budget proposal of raising FDI cap to 49%

Jul 10 2014, 18:36 IST
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The decision will help the new entrants who are cash-starved and struggling for growth.(Reuters) The decision will help the new entrants who are cash-starved and struggling for growth.(Reuters)
SummaryPNB Metlife India Managing Director and CEO Tarun Chugh opined that the 49 per cent composite increase is positive and will help the industry.

Rs 7,800 crore as FDI. We are also encouraged by the increase in Section 80C limit to Rs 1.5 lakh from Rs 1 lakh.

"While we would have looked forward to a separate limit for life insurance, we are sure this will help the retail customers who will benefit from the enhanced tax benefit on savings products, including life insurance," he added.

Manasije Mishra, CEO, Max Bupa.

This year’s budget is progressive and forward looking and clearly exhibits the new government’s understanding of the impending needs to fuel economic growth through righteous allocation of funds and impetus to foreign investment. The budget brings alive the government’s commitment to provide a stable and investor friendly tax regime. Key thrust on improving the rural economy with focus on development programmes rounds it up as an ideal budget.

From an industry standpoint, I am pleased with the budget as it fulfills the key priorities from our budget wish list primarily FDI hike, overall push to the health insurance segment and greater thrust to the PPP Model. The hike in FDI limit to 49% in insurance, will boost industry growth and deepen health insurance penetration in the country. The opening up of the sector will pave way for greater innovation and better quality healthcare. Also,  impetus to collaboration with banking correspondents and ample financial sector reform will further insurance penetration in the country. Government’s assurance to take up amendment to the insurance bill will also bring in greater focus on the sector.

The decision to invest in credible medical institutes and colleges along with digitization in rural areas will enable utilization of technologies like telemedicine to enhance quality of healthcare and healthcare access in the country.

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