Removal of service tax comes as a welcome: TR Ramachandran

TR Ramachandran, CEO & MD, Aviva India

We are quite pleased with the proposals in the Budget 2010-11 for the financial services sector.

We welcome the removal of service tax on all charges under Unit Linked Insurance Products except on FMC. This will benefit the policy holders.

The proposal to set-up a Financial-Sector Legislative Reforms Committee will bring more focus and speed up the reform process. This will certainly help the entire financial sector including insurance and also lay down the strong foundation for growth.

The reduction in tax rate upto 8 lakhs will ensure more money in the hands of the tax payer, which will promote savings.

The proposal to provide appropriate Banking, insurance and other financial facilities to habitations having population in excess of 2000 by March, 2012, will provide fillip to insurance sector as well in terms of increasing penetration in the rural areas.

Also the proposal to provide banking licenses to private companies and Non-banking finance companies will further help promote financial literacy and increase penetration for financial products.