Budget 2015: Govt focused on retirement planning, says Manish Shah

Manish Shah, co-founder & CEO, BigDecisions.com

1) The government seems determined to ensure we build much stronger social security systems for ourselves evidenced by the increased focus on retirement planning. By incentivizing an additional Rs 1 lakh per annum towards retirement investments he's probably going to facilitate the twin objectives of channelizing people's savings into funds available for long term projects and giving the NPS, a shot in the arm. For the taxpayer, the benefit is clear - assuming a 7 percent per year net return on the Rs 1 lakh per annum savings, the FM is helping today's 40 year olds build an additional corpus of Rs. 40 lakhs when they turn 60!

2) Healthcare treatment costs have been inflating at double digits over the last several years. Most people's health insurance has not kept pace with this. Including health insurance in the building up of our social security recognizes that health cover provided by the government or by employers might not be enough. Personal health insurance is increasingly, becoming a real need. The increased Rs. 10,000 tax rebate for health insurance effectively means that a family of 4, for example with it's eldest member, at 45 years of age, can increase it's total family health insurance from Rs 10 lakh to Rs 20 lakh for as little as Rs 7000 net, more per year. This is timely and a very welcome change.

3) The emphasis on reducing the over dependence on the cash economy and going after black money should hopefully see some trickle down benefits in real estate which is arguably, the largest 'absorber' of black money in the country. Perhaps, it will become reasonable to expect prices to soften if this key component of real estate demand goes down.