00:00The most awaited event of the year, Budget 2025, is on Feb 1st. On that day, our Finance
00:10Minister Nirmala Sitharaman will present the Budget in the Parliament. From CapEx to spending,
00:17investors are waiting very anxiously for some kind of good news. Hello and welcome. My name
00:22is Shruti Sarkar and you're watching Good Returns. And in this episode of Future Focus
00:27Budget 2025, we are joined by Rajiv Gupta, President, Policy Bazaar Pintex. Hello, Rajiv.
00:35Hello.
00:37Rajiv, there are a lot of speculations, a lot of expectations. But my first question to you is,
00:43what is the overall understanding, what is the overall expectations from the budget?
00:49Shruti, I think, first of all, most industries, industry players from various fields have clearly
01:00put forth their demands to raise income tax limits because that's been long due and it
01:05was raised from 1.5 lakhs to 2 lakhs. I think having more money in the hands of people
01:11is a very generic expectation across industry players. I think that's something which we are
01:17all expecting, not only BFSI, but across industries because they want more people,
01:23more money in the hands of people. So I think that's one area which certainly we're expecting
01:31to happen soon. Particularly keeping in mind our sector, one of the key changes Budget 2025
01:38may bring is the introduction of 100% FDI in the insurance sector along with
01:45from the current 74%. And that's the reason we believe it was supposed to be announced earlier
01:50in the winter session, but hoping that this gets announced in the budget session at least.
01:56The focus on infrastructure spending is going to continue because that's one area which is
02:03going to help us achieve our dream of Vixit Bharat. So I believe that infrastructure spending
02:08will continue to remain a big focus area. In fact, I wouldn't be surprised if the percentage
02:14allocation increases there. And that's an area we want to see focus going. Last year in the budget,
02:22the finance minister announced about skill development and internships. I think that's
02:28a focus area which will again continue because one of the big challenges the industry is facing today
02:35given the size of our economy, 150 crore people, is availability of skilled manpower.
02:41Particularly from tier 2, tier 3 cities, this has been a big challenge. So adopting some skill
02:49development programs, co-curriculum programs along with the corporate world will certainly
02:55help produce better talent from tier 2, tier 3 cities. Particularly if most of us want to
03:02make inroads in the deeper pockets of the country. That's an area which I think the
03:08focus should continue. In my view, cyber security is one of the biggest concerns
03:17which across industries we are all facing today. And I believe that a lot of focus on this side
03:25should also happen. So some announcement on cyber security is likely to take place because
03:32I believe that this is really hitting all of us very hard. And these cyber security
03:40software professionals are probably far ahead of us. And I think somewhere some focus is likely to
03:47be seen in this space where government is willing to invest more money to protect consumers and
03:53corporates from such cyber security issues. The other area I think as far as banking is
04:01concerned, I think home loans, the limit was not increased. The tax deduction limit, I think more
04:10than a decade. It was earlier increased from 1.5 lakhs to 2 lakhs. And I am hoping that some work
04:18will be done in that space because buying a home, owning a home, home for all has been the vision
04:26for the government. So hoping that to support the middle income group, which has always had
04:32big expectations of the budget and probably they have not got any direct benefit over these years.
04:38So I think this budget should try and focus on the middle income group more. Which is why I said
04:43the income tax, lab rates are likely to undergo a change. Home loan interest undergoing a change.
04:50And if I look at my sector, I think hopefully if we want insurance for all, then the GST,
04:58long pending GST reduction or waiver should also happen.
05:06You know, Rajiv couldn't agree more on the GST part on the infra or cyber security that you spoke
05:12about. You also mentioned Vixit Bharat, Rajiv. Let me, let's just talk about that. When do you
05:21think India will reach, will India will become 5 trillion dollar economy? And do you think that
05:27we can well achieve, will be developed country by 2047 as PM Narendra Modi says that, you know,
05:36his aspiration is that India will become Vixit Bharat by 2047. What's your take on that?
05:42I certainly believe that this is a dream come true. And in my view, whatever the PM is saying
05:52is very much possible to be achieved. You know, it is just that each sector will have to break
05:57down the goal. You know, we have 20 years from now, leaving aside two years, you know, as a
06:04question for all of us to plan, you know, with the government on what we need to do in our
06:08respective sectors to make India Vixit Bharat, you know. So I personally believe the 5 trillion
06:14economy is not very far away. I am expecting 27 or maybe latest by 28. But 2027, we should
06:21certainly see a 5 trillion economy, you know, happening in the country. Now, coming back to
06:26the original question, if I look at my sector, forget my sector, I think, today, India prides
06:34in itself in terms of the younger population we have, right. But 10% of our population,
06:40even today, is senior citizens. And 2045, this number will scale to 30 to 35%,
06:48which means we're talking about 70 crore senior citizens in this country.
06:52And as per today's statistics, 65% of these people don't have any income,
06:59no insurance plan, no income. Now imagine in a country where there is no social security scheme,
07:06and where there are pensions are eroding, joint family system is going away. Look at the social
07:12impact this problem is going to create. So the real missing middle are today's 40 year olds.
07:17So somewhere, I think, the government and the sector will have to focus in reaching out to this
07:24set of people across tier one, tier two, tier three cities, if we want to avoid this big social
07:30impact, which is going to be happening soon. I mean, if there is no focus on this sector.
07:36Right, right. Right, you said that. Moving on, let's talk about a little bit about markets,
07:44about sectors, probably, what are the top sectors to look at, probably right before the budget,
07:51that you would, you know, in your view?
07:55I think MSME will continue to get focus. Clearly, manufacturing sector is one area where
08:02India has to do much better, you know, service has been focused. So I think MSME will continue to
08:09get a lot of support in this budget, you know, BFSI has been waiting, you know, with a long
08:18laundry list. So hoping that fintech, you know, comes under some kind of regulations, some support
08:24to ensure the fintechs continue to do well, because there is still that trust deficit when
08:29it comes to fintech, you know. So I think some regulations around fintech to strengthen,
08:35because if we have to build financial literacy in this country, if we want
08:41to go beyond Zandan bank accounts and have everybody to understand how to borrow,
08:46why buying an insurance is important, you know, it is important that this area is focused,
08:53you know, if we don't, then I think it is not going to be possible. So till we literate people,
08:59you know, it's not possible for us to achieve this dream.
09:04Right, right. Rajeev, before I let you go, I have one final question to ask you about the
09:11insurance sector. Now, 10-20 years, you know, before, you know, people like us never thought
09:19about insurance. But now, like you said that, you know, we don't really have a social security
09:25scheme like in the US. What are the benefits or what are the things that you expect that the
09:32government should focus on about this sector? Because this sector is now highly watched not
09:39only by corporates, but it's important for the senior citizens, it's important for students,
09:44it's important for a homemaker. So, please, please, let us know about your views on this.
09:52Yeah, so I think for the insurance sector, there has been a long pending demand, you know,
09:56as I mentioned to you earlier, insurance penetration in this country is still continues
10:02to be a single digit number. Surprisingly, after 20 years, the penetration levels have come down.
10:09You know, so something serious will have to be done collectively by the government by the sector.
10:16I mean, 100% FDI will certainly attract more players to come into this country.
10:22For a size of our country, I think less than 200 or 300 insurers is not justified. You know,
10:30even a country like Dubai has 100 insurance companies, and we have 53. Now imagine if I
10:37have to cover all pockets of this country, you need all kinds of players who are willing to make
10:41capital investment in this country, focus more on deep rooted states, tier two, tier three cities.
10:47So clearly, I think, inviting or easing, you know, 100% FDI will make a lot of sense,
10:54you know, for the sector to invite more people. The other part is today insurance premiums,
11:00the deduction continues to fall under the overall Section 80C limit,
11:05which is continues to be 1,50,000 rupees. Now imagine that 1,50,000 takes care of PPF, home
11:13loan, you know, everything. Now, this is not going to help the sector. The sector needs a dedicated
11:20deduction when it comes to health insurance. So we are recommending strongly, you know,
11:25that the current amount for senior citizens may be doubled. Because that's an area which
11:31needs focus. Because senior citizens will continue to face spiraling health costs
11:38in this country, you know, and if health cost is going to improve, sorry, increase,
11:43then certainly you need, you know, more budget incentives for people to kind of plan for that
11:50expenditure. You know, if somebody has to buy a health insurance, this is a key attraction,
11:55right? Similarly, the overall limit, you know, under Section 80C, or create a separate limit
12:03for those people who buy a term loan insurance plan, because you need to protect your family,
12:07in case something happens to you. So I believe that that is also crucial overall,
12:13either increase the Section 80C limit, or create a separate limit, you know, for the sector,
12:19you know. Similarly, pensions, you know, are treated differently when it comes from
12:25the insurance industry, you know, the pension proceeds are taxable, whereas
12:32the pension is not taxable when it's when it goes through the PFRDA, you know. So I think
12:39it's important that a level playing field here is created. As I mentioned to you, one of the
12:45key challenges is to have an income when you're not earning. And pension certainly is one of the
12:53areas which can help you support achieve that dream. So I believe that that's an area which
12:58certainly we expecting some change to happen. So Section 80D limit, we are hoping from 50,000,
13:06it is improved to 1 lakh, you know, that's, so I think that's something which is certainly
13:12needed at this point of time, particularly to achieve the mission of insurance for all,
13:18you know. I think mostly we have covered, I also think that
13:29to create more institutes which produce insurance talent. So for example, we have an NIA,
13:36we have an Insurance Institute of India, you know. Now, these are very, very few in number,
13:43given the size of this country. And when it comes to first choice of employment, you know,
13:49insurance is not something which people straightaway consider to move because they think
13:56traditionally insurance selling is, is perceived as low profile job. But whereas the sector,
14:02you will look at the AUM and look at the contribution to the economy,
14:06I think this sector certainly warrants, you know, more skilled professionals coming out.
14:11So in fact, I was there in the NIA meeting the other day, and I requested that NIA should have
14:17more centers across all regions. National Insurance Academy, which is currently based in Pune,
14:23should have all the regions covered. So somewhere, you know, the focus on
14:28building talent for the sector, you know, while the skill development and internship
14:34program is very good idea, but somewhere government initiated, you know, insurance
14:40institutes will certainly help. Perfect. I think skill development is something that
14:45every sector is looking at awareness about things we can do. Great insight to the questions,
14:53Rajeev. Thank you so much for joining us today, viewers. That was Rajeev Gupta,
14:58President PB FinTech. Thank you viewers for watching us. Thank you.
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