'Infrastructure required for developmental goals'

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By Prashant Sharma,

“NDA government 1.0 in the last few years have introduced constructive measures in advancing the nation’s financial security. They have also aptly articulated their intent to cover the unorganized sector under Pension schemes. Now it is time to focus on the implementation and look at expanding growth areas.  To accelerate the penetration of insurance and create a pensionable society; steps such as reducing GST rate, removing double GST on pension products, addressing the anomaly in Annuity principal taxation, and parity between the tax treatment of pension products offered by Life Insurance Companies with NPS, will go a long way.

Now is the right time for the Government to enable customers to select financial products based on individuals’ personal needs rather than creating tax baits for customers. We need to have a long-term vision to achieve increased financial inclusion. Infrastructural development currently is vital for India to achieve its developmental goals and Life Insurance sector being one of the biggest buyers of Government securities can provide long term investments to fund infrastructural projects. Youth, which is India’s demographic dividend today needs employment opportunities and the Life Insurance sector, has the potential to generate a broader spectrum of job avenues. Over 20 lakh agents supported by sector are the class of entrepreneurs which modern India needs. Increased awareness initiatives about Life Insurance supported by Government will create financial literacy and facilitate skill India.

The Government has already been investing in Digitization and needs to further intensify their efforts on it. EKYC based on Aadhaar will support these initiatives, reduce costs and facilitate faster turnaround for the end customers. While there have been multiple initiatives over the past years to increases penetration of insurance, these reforms would further aid in building a more financially inclusive and secure India.”

The author is Chief Investment Officer at Aviva Life Insurance.

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