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Budget '05-06 Views of Mr Sunil Mehta,
Country Head & Chief Executive, AIG Inc -India
Date: 01/03/05
What is your opinion about Budget 2005-06?
The FM has provided impetus towards channelizing household
wealth into long term contractual savings by increasing
the annual limit in savings instruments to Rs 100,000. This
will augur well for capital markets and development of infrastructure
in the country. The Minister also
emphasized the need to extend micro insurance programs to
wider sections of the rural population. Such initiatives
combined with effective delivery of micro finance will help
in creating income security to the
rural population.
What benefits/implications has it brought for the
insurance sector?
Further, the budget falls short of making much awaited
changes in foreign ownership levels. 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.
Given the ambitious growth targets of the government there
is a need to attract more foreign capital and the FM could
have done more in this regard.
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