Life insurance penetration in India higher than global average

The government recently said that life insurance penetration in India was higher than the world average in 2010.

“Life insurance penetration in India was higher than the world’s average in 2010 and the combined average is higher than Brazil and Russia and most of other countries of Asia including Bangladesh, Pakistan, China and Sri Lanka,” Minister of State for Finance Namo Narain Meena said in a written reply to the Lok Sabha.

“The government periodically receives proposals for providing tax incentives, inter alia, for investments in insurance and mutual funds and examination of such proposals is a part of an on-going process,” he added.

In a separate response, Meena said, Irda has informed that no foreign company is presently functioning in India.

However, foreign companies are allowed as joint venture partners in the Indian insurance industry with a Foreign Direct Investment (FDI) cap of 26 per cent and at present 38 private insurance companies are functioning in India along with their joint venture partners, he said.

In another reply, Meena said the pay scales of employees in Public Sector Banks (PSBs) are determined as per the agreement between the management and Associations/Unions every five years.

“Besides the pay, employees in banks are also entitled to a number of other allowances and benefits. The pay scale of the Central Government employees are finalised by Government taking the recommendations of Central Pay Commission into consideration and these pay scales are reviewed generally after ten years,” he said.

The terms and conditions of service of Central Government employees and Bank employees are entirely different and are regulated in terms of the respective service conditions, Meena said, adding that hence, no comparison can be drawn between pay structure of Central Government employees and of bank employees.

To another query, Meena said RBI has initiated several measures to check the menace of counterfeiting of banknotes.

These measures include running education campaigns for members of the public and cash handlers so as to facilitate detection of counterfeits.

RBI has been incorporating new security features and designs in the bank notes to stay ahead of the counterfeiters, Meena said, adding that new security features were added to banknotes in all denominations during the year 2005-06.

Instructions have been issued to banks to disburse only sorted and genuine notes through their counters/ATMs, he added.