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Markets to generate wealth in long term: ICICI PruLife

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Hyderabad: Despite the uncertainty caused by global trade war and other macroeconomic factors, a top private insurer feels Indian equity markets create wealth for investors in the long run.
“If India’s nominal growth is going to be 10 per cent, the opportunity to create wealth is so much. But the growth would not be uniform. There could be ups and downs. And the markets too would perform similarly. But in the long term, it would beat the inflation and create wealth. For this, you need to have a 10-year or 20-year horizon for investment,” said Sandeep Batra, executive director of ICICI Prudential Life Insurance.
For this, he, however, insists that the investor need to have financial discipline. “When you invest in a house, it may give you great returns because you don’t touch for years. Equity and market linked products may have short term fluctuations. There has never been customers who haven’t made money,” he said.
Speaking about savings-cum-insurance products, Mr Batra said Ulips are the most efficient as they are transparent and charges are minimal.
“If you are using insurance for long term investments, Ulips are the best. If you are risk-averse, you can have 80 per cent debt or 100 per cent debt. Over a 10-year period, you will get good returns,” he said, cautioning investors against getting euphoric or scared due to market movements.
Ulips, however, have a long way to go in India as they make only 15 per cent of savings or investment products in the insurance sector. Endowment policies constitute 85 per cent of this market.
This, Mr Batra said, is gradually changing as youngsters are preferring Ulip products over traditional endowment policy. “Youth is a little more aware person. He knows that equity markets fluctuate but can create wealth.”
While agreeing that there has not been major path breaking innovations in the insurance product offerings, Mr Batra claims that life insurance products must be simple for people to understand and are bound by regulations.
He, however, said that his company has a health cover product that cover 34 critical illness — which is a risk coverage policies and not morbidity-based ones.


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Cabinet clears setting up of centralised GST appellate authority

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New Delhi: The Union Cabinet on Wednesday approved setting up of a centralised Appellate Authority for Advance Ruling (AAAR) under the goods and services tax that would decide on cases where there are divergent orders at the state level.

The setting up of a centralised AAAR would require amendments to the GST Acts. The centralised authority as an appellate body will only take up cases wherein the Authority for Advance Ruling (AAR) of two states have passed divergent orders.

The Goods and Services Tax (GST) Council, headed by Finance Minister Arun Jaitley, and comprising state counterparts, in December decided to establish the centralised AAAR.

 

“The Cabinet has cleared the GST appellate authority,” a source said after the meeting of the Cabinet headed by Prime Minister Narendra Modi.

In view of the confusion created by contradictory rulings given by different AARs on the same or similar issues, the industry had been demanding a centralised appellate authority that could reconcile the contradictory verdicts of different AARs.

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Urbanisation to be big driver of Indian economic growth: Kant

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Davos: Urbanisation will be a big driver of economic growth in India going forward, supported by favourable macroeconomic factors, accelerated infrastructure building and continuing reforms, NITI Aayog CEO Amitabh Kant said.

Speaking here at an event on sidelines of the World Economic Forum Annual Meeting, he also said the Indian economy may even exceed the IMF growth forecast of 7.5 per cent for the country.

Kant said IMF has forecast 7.5 per cent growth for India despite a gloomy outlook for the global economy and this itself is good, though there are expectations that this estimate would be surpassed. He said India is giving a big push to urbanisation with more than 100 smart cities being developed.

 

The country is also using technology in a big way to change the way business and governance is done, he added. Besides a massive infrastructure building is happening, bank credit flow has rebounded and macroeconomic factors like inflation and fiscal deficit are also being supportive, Kant said.

DIPP Secretary Ramesh Abhishek noted that states are competing with each other to attract investments and all political parties have adopted the economic reform process. He listed various reform initiatives undertaken in India, including on areas like ease of doing business, FDI, manufacturing and taxation.

They were speaking at Institutional investors’ breakfast roundtable, organised by the industry chamber CII and Kotak Mahindra Bank. Other participants included CII Director General Chandrajit Banerjee and leaders from Indian and foreign companies.

On questions about some persisting issues in doing business including on tax and insolvency related issues, Abhishek said a lot of efforts have been put in to remove all bottlenecks and starting a business doesn’t take more than a day. Besides, special provisions have been made for startups and angel investors, he added.

Kant said efforts are also being made to remove all physical intervention and digitise the entire process of inter-ministerial and inter-department consultations to fast-track the decisions.

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India will surpass China, says Raghuram Rajan

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Davos: India will eventually surpass China in economic size and will be in a better position to create the infrastructure being promised by the Chinese side in South Asian countries, former RBI Governor Raghuram Rajan said.

Addressing a session on Strategic Outlook for South Asia, Dr Rajan said that the Indian economy would continue to grow while growth rate is slowing down in China.

“Historically, India had a bigger role in the region but China has now grown much bigger than India and has presented itself as a counter-balance to India in the region,” Dr Rajan said at the WEF Annual Meeting 2019.

 

“India will become bigger than China eventually as China would slow down and India would continue to grow. So India will be in a better position to create the infrastructure in the region which China is promising today. But this competition is good for the region and it will benefit for sure,” he said.

The comments assume significance with China working on a lot of infrastructure projects across the region. In 2017, India became the sixth largest economy with a GDP of $2.59 trillion while China was the second large with a GDP of $12.23 trillion.

At the same session, Nepal PM K.P. Sharma Oli cited collaboration with China as well as India as reasons for the economic growth.

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