Below is the views on a quick Budget Comment by Mr. Vignesh Shahane, Wholetime Director & CEO, IDBI Federal Life Insurance.
While there were expectations on more reforms around the life insurance sector, some of the other announcements are definitely a step in the right direction. Doing away with 5% TDS on insurance agents’ commissions is a great step forward in attracting and retaining right talent in the sector.
The 2017 Budget was announced against the backdrop of key themes like demonetisation and digization. The government has continued its war against black money by banning cash transactions beyond Rs. 3 lacs. Finance minister has tried to support rural, agri and allied sector which generates maximum employment, by giving 24% higher allocation. Reducing tax from 30% to 25% for companies having turnover of less than Rs.50 crore is also a step in the same direction. Government has continued to focus on infrastructure sector growth.
Government has further strengthened its digitization efforts by allocating Rs. 10,000 Crore for Bharat Net Project. This is likely to strengthen the distribution reach and inclusion efforts.
Tax rate for lowest income slab has been slashed to 5% from existing 10% - this is a welcome move as it will further enhance the savings ability of individuals. Also, In its efforts to increase the ease of doing business in India, the government has announced the abolition of FIPB.
Government has also shown its resolve to improve fiscal condition of the country and has been project fiscal deficit of 3.2% from 3.5%.
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