A missed opportunity for insurance sector

For the insurance sector the only regulatory change proposed in the Budget is the increase in deduction allowed under section 80D for medical insurance premiums from Rs10,000 to Rs15,000 and to Rs20,000 for senior citizens, which is a very positive move.
There was also a mention in the Budget that the insurance bill would be presented in the Parliament.

One would have expected more incentives on the insurance and pension investments, especially given that the savings need to be channelled for infrastructure. So this is definitely a missed opportunity, said Trevor Bull, managing director of Tata AIG Life Insurance Company.

On the tax front, the positive factor is that there is no increase in service tax and that the overall tax structure has not been tampered with. The focus has been on increasing spending in the core areas while keeping the tax rates largely stable. There are some measures to cool the inflation as well.

The budget has also been guided by the tax windfall this year, the upcoming state elections and the need to placate the Left parties. However, in fairness, if all these measures are executed properly, it will allow more inclusive growth although over a longer period.