It is overall a very positive budget. It recognizes the vibrant growth potential of the Indian economy. GDP growth has been above 8 per cent and is targeted at 10 per cent. There is a considerable impetus on growth of infrastructure, rural and education sector.
For the insurance sector it is, however, a mixed bag. FBT on superannuation has been rationalized to allow upto two lacs per annum of investment. This will help the group insurance business to grow.
On the other hand, the unique value of life insurance as a long-term provider of protection and savings has not been recognized. Tax emption limit of 80 C has not been enhanced and its limits are inadequate in its current form. There are too many instruments, all not sufficiently long term in nature, competing for 80 C.
We are disappointed with the increase in the burden of service tax, which will raise input costs. This further weighs down a nascent industry like life insurance, which has a long gestation period.
(Gary R Bennett, Managing Director and Chief Executive Officer, Max New York Life)