Private insurance companies are expecting the foreign direct investment (FDI )cap of 26 per cent to be raised in the Union Budget 2007-08, something which Union finance minister P. Chidambaram announced in his Budget presentation last year.
"Fresh foreign direct investment is required to fuel this (the insurance industry) and to ensure that customers in India get access to world-class products, which the foreign partners bring into India. The increase in FDI will give the Indian insurance industry the necessary capital infusion required for its development and expansion," says Bert Paterson, managing director of Aviva India. Adds Gary Bennett, managing director and CEO of Max New York Life, "The potential of the Indian market is huge and even a 26 per cent stake in this market has enormous implications of commitment and reputation. Raising the cap on foreign direct investment in insurance companies to 49 per cent will be a welcome, pragmatic move. This will help in faster growth of insurance sector that will help in bringing larger Indian population under financial security cover.
According to Mr Bennett, the growth in the insurance sector will also make more capital available for infrastructure projects. "The increase in capital infusion will help catalyse the permanent growth sectors in India and create more job opportunities in the sector," he says.
"In the last year’s Budget announcement, some significant changes were made to the taxation of insurance and saving instruments. While the overall limit under Section 80C remained the same, the cap on pension of Rs 10,000 was abolished and the customers have been able to invest the entire Rs 1 lakh in pension schemes. Whilst this initiative was welcome it is, on and of itself, not sufficient to stimulate growth in a sector that is of prime importance for the future economic well-being of India," says Mr Paterson. Referring to the FDI issue, Mr Paterson says, "We are hoping that all political parties will look at the FDI limit in an overall perspective."
Courtesy : Asianage.com
"Fresh foreign direct investment is required to fuel this (the insurance industry) and to ensure that customers in India get access to world-class products, which the foreign partners bring into India. The increase in FDI will give the Indian insurance industry the necessary capital infusion required for its development and expansion," says Bert Paterson, managing director of Aviva India. Adds Gary Bennett, managing director and CEO of Max New York Life, "The potential of the Indian market is huge and even a 26 per cent stake in this market has enormous implications of commitment and reputation. Raising the cap on foreign direct investment in insurance companies to 49 per cent will be a welcome, pragmatic move. This will help in faster growth of insurance sector that will help in bringing larger Indian population under financial security cover.
According to Mr Bennett, the growth in the insurance sector will also make more capital available for infrastructure projects. "The increase in capital infusion will help catalyse the permanent growth sectors in India and create more job opportunities in the sector," he says.
"In the last year’s Budget announcement, some significant changes were made to the taxation of insurance and saving instruments. While the overall limit under Section 80C remained the same, the cap on pension of Rs 10,000 was abolished and the customers have been able to invest the entire Rs 1 lakh in pension schemes. Whilst this initiative was welcome it is, on and of itself, not sufficient to stimulate growth in a sector that is of prime importance for the future economic well-being of India," says Mr Paterson. Referring to the FDI issue, Mr Paterson says, "We are hoping that all political parties will look at the FDI limit in an overall perspective."
Courtesy : Asianage.com