Budget 2021 Expectations – Pensions products require tax parity with NPS to increase penetration, Aditya Birla Sun Life Insurance MD and CEO says

Budget 2021 Expectations - The Budget 2021 will be made keeping in mind the economic situation of the country, Kamlesh Rao, Managing Director (MD) and Chief Executive Officer (CEO) of Aditya Birla Sun Life Insurance opines. The government will also likely keep the Coronavirus Pandemic in mind while preparing this year's budget, he added.

As far as the life insurance sector is concerned, people put their long term savings in insurance policies so that this money could be used at the time of their retirements or any unforeseen situation.

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As far as the pension is concerned, the government did a very good thing by creating a separate deduction in NPS (National Pension System) of Rs 50,000, the MD said.

The pension products of life insurance which are similar to NPS platform do not get the same treatment, so one of the things that the industry looks forward to is that the government should give a parity.

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He said that there are 24 life insurance companies and the might of the distribution capabilities of all of them put together is huge. This will help the sector to enhance its distribution capabilities further.

To have a tax parity is one of the expectations, Rao said.

Another thing is that, it has been seen that the cost of hospitalisation and unforeseen death has been very high because of the pandemic situation. The government should create a separate deduction to increase its penetration, he suggested.

The budget is only a fortnight away and will be presented by Union Finance Minister Nirmala Sitharaman on 1 February.