ABI urges govt to offer tax incentives for savings plans

New Delhi, March 21 | Updated: Mar 22 2006, 06:02am hrs
The Association of British Insurers (ABI) said that the government must offer stronger tax incentives for savings instruments. Pointing out that insurance is a capital intensive sector, Stephen Haddrill, director general of ABI, said that the need of the hour is to increase the foreign direct investment limit to 49% from the current level of 26%.

We believe the governments proposal to raise the FDI cap to 49% to be vital. This will enable India to attract foreign invetsment from a wider range of overseas companies, he told mediapersons on Tuesday.

Mr Haddrill said the decision to hike the FDI limit would also enable the existing joint ventures, to increase capital and serve more customers with a wider range of products. He added that British insurers had a long term committment to invest in India.

Shikha Sharma, managing director and CEO of ICICI Prudential Life Insurance, said that a stable tax regime recognising long term saving aspect and product innovation would boost growth in the sector. The proposed exempt exempt tax mechanism would hinder growth, she added.

Antony Jacob, managing director of Royal Sundaram Alliance Insurance company, pointed out that currently 70% of general insurance market was price controlled.