There were no big-bang reforms but the overall policy direction laid down by the finance minister for the next two to three years augurs well for putting the economy back on a growth track. Steps have been taken to tackle the falling savings and investment rates. We also believe that clarity on the tax structure for real estate investment trusts and infrastructure investment trusts means these fund-starved sectors could attract more funding. On the fiscal front, the revenue assumptions are reasonable and the FM has laid down a fiscal correction road map by targeting a three per cent deficit within two years. This is again investment-friendly, as this will help to bring down interest rates.
One would, however, have hoped for greater clarity on the GST roll-out. We welcome the FDI increase in insurance to 49 per cent. The sector needs the funding to expand its footprint and increase the penetration of insurance in the country. The increase in Sec 80C limit to Rs 1.5 lakh is good news for financial savings and for the insurance sector. This will encourage retail investors to save more in long-term instruments like insurance, and at the same time, provide long-term funding resources for the country.
Amitabh Chaudhry MD & CEO, HDFC Life Insurance