The Hindu Business Line : `No concrete step to hike FDI limit'

While the introduction of income tax deduction on Rs 1 lakh on account of savings was welcomed, no concrete move to raise foreign direct investment (FDI) in the insurance sector was bemoaned.

Mr Sunil Mehta, Country Head & Chief Executive, AIG Inc (India) said, "The Government's earlier announcements of raising $150 billion FDI for infrastructure will continue to be a challenge unless steps are taken to increase FDI sectoral caps and liberalise FDI in other sectors. Though the Minister commended the growth in the insurance sector, there was no mention of the steps being taken for increasing FDI in insurance based on his Budget announcements in 2004."

Mr Anil Jhala, CFO, Birla Sun Life Insurance Company Ltd said, "We welcome the move taken by the Finance Minister in respect of promoting and incentivising the long-term savings by introducing the availability of deduction of Rs 1 lakh and the reduction of corporate tax from 35 per cent to 30 per cent.''

Mr Sam Ghosh, CEO, Bajaj Allianz Life Insurance and Country Manager, Allianz, said "Removal of Sec 88 benefit which was primarily for long-term savings like insurance and NSC will impact the flow of investments to, mainly life insurance."

"It was welcome news that the Pension Fund Regulatory Development Authority Bill will be placed in Parliament to replace the Ordinance and speed up the starting of the pension business. Micro insurance is a positive move to bring insurance to the underprivileged and broaden the life insurance market."

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