The Hindu Business Line : `There could have been more for insurance sector'

"With economic growth firmly set in the 8 per cent plus range and a targeted annual growth rate of about 10 per cent for the 11th Five Year Plan period, the Union Budget for fiscal 2008 aims at sustaining the growth momentum while extending the benefits of the same to the larger masses, according to the Managing Director and CEO, ICICI Bank, Mr K.V. Kamath.

The Budget maintains continuity with past policies and introduces pragmatic measures aimed at increasing overall economic efficiency and productivity, fiscal consolidation and improvement in government finances.

The financial sector policies announced in the Budget are in continuance of the current supportive environment. In particular the decision to use the PAN number as the sole identification number in capital markets transactions is a welcome move. The Budget has announced setting up of an autonomous debt management office to separate debt management from monetary management. It would need to be seen how this will evolve going forward.

Mr M.D. Mallya, Chairman and Managing Director, Bank of Maharashtra, says the Budget lays emphasis on growth in the long-term perspective. RRBs have been allowed branch expansion and accept NRE/FCNR deposits— a step in that direction. Education is a thrust area to ensure that in the long run India does not face a dearth of talent.

Mr Bert Paterson, Managing Director, Aviva Life Insurance, said that while the Finance Minister has made significant positive announcements on agriculture, education and insurance for the economically underprivileged, there could have been more for the insurance sector.

"I am disappointed that the Government has not taken the opportunity to announce much needed reforms required for the growth and development of the insurance sector. This Budget represents a missed opportunity to stimulate further growth, which is crucial to the growth and long-term development of India. However, we look forward to the comprehensive Bill to amend insurance laws to be introduced later."

"The tax benefit on pensions and long-term savings contribution need to be increased. This did not happen in the Budget. The world over, the development of much needed long-term saving instruments have been supported by tax exemptions. Countries such as the UK and Ireland provide incentives in form of tax credits even to non-tax payers by topping up their contributions by 20-25 per cent. If the government does not implement the tax benefit to at least Rs 1 lakh each for pensions, annuity and life insurance, we will see less long-term retirement savings amongst the masses."