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Interview of Sunil Mehta,
Country Head,
Tata AIG Life Insurance Company
On Budget 2004-05
What is your opinion about Budget 2004-05?
Overall a positive budget. Its a judicial mix between generating
sustainable economic growth and the needs for impetus to
agriculture. It further provides the much required resources
for primary education and healthcare. And at the same time
the Finance Minister has taken steps to catalyse growth
through increasing FDI in telecom, insurance and aviation.
I am confident that it will generate long term resources
which will be used for further investment and infrastructure.
What benefits has it brought for the insurance
sector?
The insurance sector will see more infusion of FDI. I think
there is other collateral benefit which is technology support
from india.
What will be the implications of the hike in FDI
for your company?
The foreign players based on their own agreements will bring
in more capital in their Indian company which means more
resources for investment in this industry. I strongly believe
that the insurance markets will expand further encouraging
new product development.
Do you see more insurance companies setting up
shop here?
Yes. There is a possibility. I think the government needs
to open up the health insurance sector. And I also believe
that the FM will provide more direction on the pension reforms
in due course.
What about the hike in service tax. Will it not
make insurance costly?
Insurance is a long term investment and a marginal impact
I do not believe will have a significant development on
the insruance sector. It is obvious that we would favour
a lower tax level so that there are more consumers who are
attracted to this industry. It is in the national interest
also.
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