I have borrowed a few words for the title of this article from the closing remarks of our Honourable Union Finance Minister, ” It is said when my goal is in sight, the Winds Favour Me and I fly”, when he presented the Union Budget for the financial year 2017-18 to the Parliament on February 1 2017.
As in every year, there are both visible and invisible gains for the life insurance sector in this Budget too.
Direct Gains
The existing rate of the income tax for Individuals with income between Rs 2.5 to Rs 5 lakhs is reduced from 10% to 5%.
1.96 crore Individuals are directly benefited by this measure.
With this concession, practically all people with an income of Rs 3 lakhs will be out of the tax net.
Besides this, effectively those with an annual income of Rs 4.5 lakhs could have zero liability if they tap the tax exemptions available for investments under Section 80C of the Income-Tax Act.
All other categories of taxpayers in subsequent income brackets will get a benefit of Rs 12500 due to the tax reduction to 5% under the first slab.
76 Lakhs people have an income of Rs 10 lakhs in this country, out of which 56 lakhs are salaried persons.
Thus the life insurance agents have a copious population of about 2.75 crores people with a spare income in view of this tax measure and they are all ready for being tapped for insurance policies.
There are 1.72 lakhs people in India with an annual income of Rs 50 lakhs and more up to Rs 1 crore.
Have our agents tapped these resources fully? The answer is mostly negative.
Indirect Gains
This Budget has focused on 10 distinct themes- Farming, Rural, Youth, Poor & Under-privileged Health care, Infrastructure, Financial Sector, Speedy Accountability, Public Service, Prudent Fiscal Management and Tax Administration for the Honest.
With the above emphasis, let us look at some of the salient features of the Budget:
- Government targets to bring 1 crore households out of poverty by 2019.
- Lakh Farm Ponds will be taken up under the MGNREGA.
- Lakh crores of rupees will be spent for Rural India.
- MGNREGA will double the farmers’ income.
- Government to ensure women’s participation in the MGNREGA to 55%.
- To complete 1 crore houses for those without homes.
- Government has allotted Rs 19000 crores for the Pradhan Mantri Gram Sadak Yojana.
- To achieve 100% Rural Electrification.
- 100 Skill India International Centres will be set up.
- Rs 500 crores allocated for Mahila Shakti Kendras.
- Rs 184632 crores allocated for Women and Child development.
- 1.5 Health Sub-centres will be transformed in to Health Wellness Centres.
- Aadhaar based Smart Cards will be issued to Senior Citizens to monitor health.
- Elimination of Tuberculosis by 2025 targeted.
- Pregnant women to be given Rs 6000 each for child delivery.
- Rs 3961354 crores allocated for Infrastructure.
- Rs 131000 crores for Railways and Rs 64000 crores for Highways.
- 3500 kms of Railway Lines to be commissioned, up from 2800 kms of last year.
- Rs 126000 crores allocated for Energy production based investments.
Implications
From each of the above provisions, we can draw our strengths and procure new business:
1. Gandhiji always believed that India lived in its villages. By its huge allocations for Rural Electrification, MGNREGA, Rural Housing etc, villages will become prosperous and it is for our agents to tap the resources.
2. Health is Wealth- Government fully is committed to it by its allocations for health care, help to the pregnant women, up gradation of Health Sub Centres and targeting elimination of Tuberculosis. A healthy society is ideal for insurance. When people are hale and hearty and have spare money, they will save it for life insurance.
3. Empowerment of Women is our noble objective, which is well-served by allotting funds to Mahila Shakti Kendras. These women become ambassadors for savings and life insurance.
4. The Government’s Plans for improving the Infrastructure in the country are laudable- they lead to a lot of employment, which in turn generates a lot of income for the workers. These workers are our ideal prospects for life insurance.
5. Similarly, the strategies for enhancing the capacity of Railways, modernization of Railway Stations, laying of new routes etc are sure signs of growth. These are in turn fertile grounds for more and more new business.
6. The Plans of the Highways to lay more roads will carry more connectivity to rural areas culminating in more rural wealth and happiness among the people. What else can be more conducive for higher new business of life insurance!
7. This list is endless. We have to convert each welfare measure of the Government to our advantage and reap better new business.
8. This in turn changes into a better society, happier citizens and more money for the Nation Building activities.
In Your Hands
We can’t expect apples to fall in our hands.
We have to jump and pluck them by our own indigenous methods and by usurping the occasion, wherever possible.
There is a proverb in Tamil which says “For the Talented, even a simple grass is a strong weapon”.
Similarly, for the people in insurance too, every welfare proposal of the Government is a boon for our own effective action and we have to cash on the golden opportunity
Yes, as correctly mentioned by the Honorable Union Finance Minister, WINDS FAVOUR LIFE INSURANCE.
