Pension reform brooks no delay: FM

CARING FOR THE AGED: President A. P. J. Abdul Kalam, Union Finance Minister, P. Chidambaram, West Bengal Governor, Gopal Krihna Gandhi (left), and Chairman-cum-Managing Director of National Insurance Company, V. Ramasaamy (second from right), on the occasion of the release of Varistha Mediclaim for senior citizens in Kolkata on Wednesday.   | Photo Credit: PHOTO: SUSHANTA PATRONOBISH

Special Correspondent

President suggests dematting of insurance policy

Insurance sector still underdevelopedNational Insurance asked to penetrate rural areas

KOLKATA: Union Finance Minister P. Chidamabaram on Wednesday cautioned against any further delay in completing the unfinished reforms programme in the insurance and pension sector, saying that the "task still remained very large."

Speaking at the centenary celebrations of National Insurance Company Ltd. (NIC), he urged public opinion to bear upon political parties which had failed to reach a consensus on this issue. The finance minister was the special guest at the function where the President, A. P. J. Abdul Kalam, launched a mediclaim policy for senior citizens.

Pointing out that the progress on insurance and pension reforms had been slow over the last two-and-a-half years, he said that after 2040, India would become an ageing society and then it would face problems on this account.

He said there was need for deepening and broadening India's financial sector.

The insurance sector was still very underdeveloped as most people remained uninsured. Non-life insurance premium was just 0.65 per cent of the gross domestic product (GDP) against a world average of 3.43 per cent.

President Abdul Kalam wanted NIC to consider provision of dematerialised policies which would allow easy storage by policy-holders and might also help during calamities.

Noting that this might require a change of certain provisions in the Insurance Act at the Centre and the State, the President said, "the government may consider implementation of such changes."

Outlining the need for NIC to adopt a seven-point mission plan, he said it could penetrate rural areas and the unorganised sectors in a large way by launching innovative products. The 12-million-strong policy-holder base could double by 2011.

The president also favoured NIC getting into funding of power plants based on municipal waste and launching a health insurance scheme for rural areas through partnership with corporate hospitals.

PTI reports:

Mr. Chidambaram asked banks to advance more credit to farmers, entrepreneurs and the government for supporting economic growth.

"Bank credit has to grow to support economic growth. Banks have to advance more credit to farmers, entrepreneurs, students and the government," he said while inaugurating United Bank of India's (UBI) Internet banking service here.

On UBI's performance, he said the bank had achieved a remarkable turnaround, but it should be competitive in the market as well as in its products.

"UBI has taken 56 years to achieve Rs. 50,000 crore business, but it should double its business in 5-6 years," the minister said.