In the aftermath of the demonetisation drive, expectations from the Union budget soared higher than ever. However, not all expectations were met, especially on the insurance front.
Budget 2017 focused on the overall theme of "Transform, Energise and Clean India" (TEC India). Under TEC India, the government has introduced 10 different sub-themes to transform various sectors in India, as well as to energise and empower the youth, women and the underprivileged sections of society. A GDP growth rate pegged at 6.75-7.5% for 2017-18 is encouraging. The Finance Minister has ensured adherence to economic growth by targeting to keep the fiscal deficit to 3.2% of the GDP.
The life insurance penetration in India stands abysmally low at less than 4% and a few sops would have helped in improving the overall social security aspect.
Coming to the insurance sector, the budget had little to offer. We expected continuity of reforms in order to encourage the distribution channel and boost the digital revolution. The life insurance penetration in India stands abysmally low at less than 4% and a few sops would have helped in improving the overall social security aspect.
The income tax scenario is more positive, though, with praiseworthy reforms particularly for people falling into the lower income slab; it will provide them much desired relief. However, this could have been bolstered with an increase in the health insurance tax exemption limit. A relook here was imperative for people to get the right cover for their parents' medical needs, which is much required because of rising medical expenses.
More was expected to streamline and encourage retirement savings, especially around insurance and NPS. The new scheme announced by the Finance Minister, promising to give 8% to senior citizens is a welcome move but no initiative was announced to encourage the younger population to build a retirement nest egg. There is no doubt that the sector requires a shift in perception and a little push by the government to bring much-desired change would have done wonders.