It Is A Very Safe Budget: Dr. Amarnath Ananthanarayanan

The Union Budget 2014-15 encompassed all the major sectors of the economy; however it is a very safe budget. The positive aspect from the insurance perspective is the increase in FDI in insurance. The increase in Foreign Direct investment from 26% to 49% is a welcome move which will being in the much needed foreign investment into the insurance industry thereby helping growth and penetration of the sector.

With respect to the taxation, the move to increase the interest limit for Housing loans for tax exemption from 1.5 to 2lakhs is expected to increase demand for new home loans thereby boosting home insurance in the bargain. The increase in the 80C limit from 1 to 1.5lakhs will boost the Life Insurance sector. The increase in the tax exemption ceilings for senior citizen and others also comes as a respite.

Also, schemes like 100 smart cities, creation of Special Economic Zones, Industrial corridors and maintaining incentive for REITs, investment on state roads and NHAI will potentially increase the demand for Commercial Lines of Business and boost the infrastructure industry.  Also the emphasis on the manufacturing industry with investment allowances and revival of SEZs and small industries, would generate demand and recover industry growth.

As a resurgent budget, it was majorly focused on education and rural development. Schemes that boost the agricultural sector like short term loans for farmers, easier interest rates etc will also help in the growth of agri-related insurance.