Our Economic Bureau

Kolkata, April 11: THE Department of Economic Affairs (DEA), which comes under the Union ministry of finance, has submitted a proposal to the Union Cabinet for allowing independent fund managers to handle pension funds, according to DEA joint secretary, Ajit M Sharan.

At the sidelines of a seminar organised by the Indian Chamber of Commerce in Kolkata on Wednesday, Mr Sharan told reporters that the proposed scheme will be called the “Old Age Social and Income Security (Oasis) Scheme”.

According to Mr Sharan, the fund managers will be invited through bids and the selection will be done on the basis of their records of performance. He said that individuals willing to avail themselves of the benefits of Oasis will be required to make an annual investment of Rs 500.

The scheme is expected to receive the Union Cabinet’s approval shortly, he said, and added, “After that, the proposal will be forwarded for approval to Parliament.”The DEA’s joint secretary said that fund managers selected to manage funds under Oasis, will be required to unveil three types of funds — income funds, growth funds and balanced funds.

“The income fund will invest in debt instruments and the growth fund will invest in equity instruments,” he added.Earlier, at the seminar, Mr Sharan had stated that the draft resolution for bringing about broker regulations will be introduced in the current session of parliament.

He called on the insurance industry to facilitate the professionalisation of intermediaries. He also said that the industry should lay stress on the expansion of insurance coverage in rural areas.

“Currently, only 11 per cent of the total 314 million workers are covered under the insurance security,” he added.On the occasion, Insurance Regulatory Development Authority (Irda) chairman N Rangachari said that so far, the Life Insurance Corporation has been able to tap only 22 per cent of the total population. “The compounded annual growth rate (CAGR) in the non-life insurance sector has hovered at 14 to 16 per cent,” he maintained.

General Insurance Company (GIC) chairman D Sengupta said that at present, the Indian insurance sector contributes just 0.26 per cent to the world’s share while the Chinese insurance sector enjoys a world share of 0.72 per cent.

“Currency-wise, India’s share stands at $8,319 million, against the Chinese contribution of $16,830 million,” he added.In terms of premium as a percentage of gross domestic product, India’s share is 1.93 per cent with a world ranking of 52 and China’s share is 1.63 per cent with a world ranking of 58.