Budget Reactions: Surcharge rise on corporate tax to curb earnings: Max Life

Given the current fiscal and economic constraints the Finance Minister was facing this Union Budget 2013-14 is a balanced one with no major surprises.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead Realasset
moneycontrol.com

Home » News » Economy

Feb 28, 2013, 07.00 PM | Source: Moneycontrol.com

Budget Reactions: Surcharge rise on corporate tax to curb earnings: Max Life

Given the current fiscal and economic constraints the Finance Minister was facing this Union Budget 2013-14 is a balanced one with no major surprises.

Like this story, share it with millions of investors on M3

Budget Reactions: Surcharge rise on corporate tax to curb earnings: Max Life

Given the current fiscal and economic constraints the Finance Minister was facing this Union Budget 2013-14 is a balanced one with no major surprises.

Post Your Comments

Share Cancel

Rajesh Sud (more)

MD & CEO, Max Life Insurance | Capital Expertise: Insurance

Rajesh Sud
Max Life Insurance

Given the current fiscal and economic constraints the Finance Minister was facing this Union Budget 2013-14 is a balanced one with no major surprises. The fiscal deficit of 5.2% of GDP in the current financial year is in line with his promise and market expectations. The Finance Minister has also announced his intent to further reduce fiscal deficit  to 4.8% by Financial Year 2014 which indicates the government’s commitment towards greater fiscal discipline. 

With respect to financial inclusion and increasing insurance penetration the Union Budget has disappointed the life insurance industry with no measures taken to incentivise long-term savings and protection. The budget has not provided a separate limit for tax exemption for life insurance and pension or increased the exemption limits under section 80C. Life Insurance plays a critical role in providing long-term funds for infrastructure development by channelising domestic savings and could have helped in funding Rs.1 trillion planned to be invested in infrastructure during the 12th 5 year plan.  

However, the Finance Minister's assurance that Insurance Amendment, and PFRDA  Bills will be presented in this session, and the proposal to set up Standing Council of experts for reforms in Financial sector to compete internationally, shows his commitment towards the financial services sector. 

The budget proposal to allow Insurance and Pension companies to directly trade in debt segment is a welcome move. This will allow institutional participation in the exchange traded bond market.

The Finance Minister has further announced that Banks can now act as brokers to sell life insurance policies. While this will offer a wider array of products to the customer, there is a need to evaluate this on level of market maturity and regulatory evolvements.

KYC of banks being sufficient to acquire insurance policies is also an important step in the direction of financial inclusion as it the potential to reduce paper work if a repository of bank KYC could be created with access to life insurance companies.  

The increase of surcharge on corporate tax would suppress the earnings and could put additional pressure on consumer's if Companies decide to maintain margin's, thereby leading to inflation.

Get full Budget coverage

Ads by Google

Buy, Hold, Sell ? Hear it first on M3
Budget Reactions: Surcharge rise on corporate tax to curb earnings: Max Life

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login