“For a pension plan issued by life insurance companies, an individual contribution to the pension fund is deductible under section 80CCC under the overall limit of section 80CCE of INR 150,000. The Finance Act 2015 inserted a new sub-section (1B) under Section 80CCD of the Income Tax Act to encourage investment in NPS by any individual by allowing an additional deduction of INR 50,000 over and above the INR 1.5 lakhs available under Section 80CCE of the Act. It is recommended that to reduce the gap between the taxation of pension policies issued by Life Insurance Companies vis-à-vis NPS of the CG, the additional deduction of INR 50,000 for the premium paid (as available for NPS) should be extended to pension policies issued by Life Insurance Companies.”-
Quote 2 – “Life insurance meets the twin needs of providing protection as well as long-term savings to meet living needs. It is particularly needed in the absence of the Government’s social security scheme that is present in many global economies. We request that Honorable Finance Minister Ms. Nirmala Sitharaman consider a separate deduction to be provided for the premium paid on individual life policies. If no separate deduction is provided, the existing limit of INR 1,50,000 (i.e. section 80C) should be enhanced from INR 1,50,000 to INR 3,00,000, since the existing limit of INR 1,50,000 is too crowded with both short-term and long-term investment vying for its share.”
Life Insurance Council is the face of the Life Insurance Industry that connects the various stakeholders of the industry. It functions together with the participation of all the Life Insurers through several sub-committees towards the development of the industry. The Life Insurance Council leads the advocacy effort on the industry’s behalf before the Regulator (IRDAI), Govt. of India and all other statutory bodies. It is a consortium of 24 life insurance companies.
Snapmint, Mr. Nalin Agrawal, Founder and CEO
The e-commerce industry in smaller cities across India is witnessing an increase in sales, thanks to deeper penetration of inexpensive mobile data plans and better connectivity, in addition to cashless transaction apps which are safer and easier than ever before. An estimated 56 million+ digital shoppers from smaller cities and rural areas are online. At least 56 airports and 31 heliports being developed as a part of the Government’s efforts to provide connectivity to unserved tier 2 to 5 cities and towns with the potential to offer aviation services will be a boon in times ahead. However, the budget should cut down duties on Oil to reduce transportation costs so that the cost of distribution in Tier 2 to 5 cities comes down. The government needs to continue showing strong support to these cities by trying to upgrade the urban infrastructure by upgrading the MRTS, airports; introducing SEZs, etc.
Secondly, Tier 2 to 5 cities and towns contribute more than 50% to e-commerce and online retail. However, there is limited logistical reach and reliability in these regions. Deeper penetration of courier services and further enhancement of postal services will go a long way in cementing the logistical roadblocks. According to the industry grapevine, a sizeable chunk of merchants in tier II cities onwards can be seen going back to cash transactions. Efforts thus should be made to incentivize merchants for accepting digital payments, even if it is for a notable percentage of the entire payment. On the other hand, the Government should also offer some tax benefits for fintech companies making investments towards lending to people without credit access.
Thirdly, To boost demand, steps need to be taken to increase the disposable income in the hands of the consumers. The rationalization of income tax slab rates is the need of the hour. In the past, union budgets have rendered relief in the form of rebates to individuals having an annual income of up to Rs 5 lakh, thereby marking their tax liability to nil. The same set of individuals could still be handed over a nil tax liability (without any rebate) if the Government decides to increase the non-chargeable tax slabs to Rs 5 lakh – a move which will certainly increase the disposable income of the common man.
Fourthly, a large part of the cash economy which is now under the lens of GST has rendered many businesses unviable due to shrinking of incomes. This impacts the income and consumption of associated households, which are primarily in tier 2 to 5 cities and towns. A reduction in GST can thus play a critical role along with an increase in manufacturing output is extremely critical- a scenario that will not just bring down bank NPAs (which will increase liquidity) but also boost consumption. A boost in manufacturing and investments in clothing, electronics and semiconductor industries will not just reduce product prices but also help lower the volume of imports in these categories.
Outside of defense, railways and homeland security- the budget should focus on reducing expenditure via disinvestment centric initiatives. There is a critical need to offset a decrease in revenues that may arise from reducing taxes and duties.
Nalin Agrawal is the Founder and CEO of Snapmint, a financial services platform that provides purchase financing to millennials and consumers in Tier 2-5 cities. Nalin started Snapmint with the belief that by redesigning the financial technologies from its core, we can bridge the huge gap of economic/consumption disparity that exists not just between the top 5% consumers in India and the rest of India but also between India and the developed economies.
Nalin has over 15 years of experience in architecting data-driven technologies for some of the top brands in media, banking, and automobile industries.