The idea that the Indian State should invest in Insurance Sector is a sensible observation on the part of the policy makers. It is true that this country has a huge tourism industry and the service sector also contributes to the overall GDP growth but still it seems very limited when we talk about the private sectors in India. Only 5% of Indian State investment in Insurance is utilized in the Hospital Insurance sector, while the rest of the money is channeled into the other streams. Why?

Well, I think the situation has changed now. After the government took a decision to liberalize the already existing foreign direct investment in India, all the rules were cleared long before. The only thing that was required was that the projects must be oriented towards developing the infrastructure in the state and not for earning profits from the people of that particular state. This change has been reflected in the policies of various State level institutions, which have now become more flexible and investor friendly. So, now we can see the impact of this investment in the insurance sector on the overall economy of the country.

In my opinion, the biggest change has been in the policies of the private sector. Earlier they were happy to take money from the Indian investors and then use it in purchasing shares or making acquisitions and thus increasing their own shareholdings in that sector. However, now they are finding it difficult to compete in the field and trying to adopt a more rational approach. Instead of being a buyer and seller, they are now an investor and seller, taking the profit and reducing the loss. Not only this, the government has also played a major role in encouraging the growth of the private sector and has also ensured that the sector does not succumb to pressures due to lack of resources and excessive competition.

The other factor that led to the growing importance of the Indian insurance sector is the impact of the stimulus package on the long term capital markets. In fact, as I understand it, all the ministries of finance together have intervened in the capital market to encourage the growth of the financial markets. This was done not only to support the growth of the financial markets, but also to ensure that the long term capital flows into the financial system.

All these factors together can be said to be the basic reason for the sudden rise in the capital formation in the Indian economy. Not only this, the increase in the disposable income of the common man has also helped the economy to improve the fiscal balance. However, this is not the end of all this. To make the story short, if you take a look at the scenario before the investment in the insurance sector, you will find that there are several other reasons for the same.

For instance, a closer look at the economic structure of the country, you will find that agriculture plays a major role in the GDP growth. The non-foodgrain specialization is a big strength of the Indian economy. The rise of the manufacturing sector has led to an increased demand for the food grains and the processing of these foods has become highly automated. Given this situation, the rural population has been able to lift themselves out of poverty. In addition to this, another important reason why the investment in the insurance sector would be the key to boost the long-term capital flow in the economy is because the fertilizer industry has also gained tremendous importance in the country. This sector of the economy is directly related with the agricultural sector.

In addition to this, another reason why the investment in the insurance sector would be the key to boost the finance flow in the economy is because the government has allowed the introduction of many new fiscal policy schemes. For instance, the Food and Livestock Research Act was introduced by the government to support the production of the domestic food. This act has indirectly helped the domestic food production and the domestic distribution. In fact, it is estimated that the level playing field in the field of food grains has been significantly liberalized. Furthermore, the growth in the export market of commodities like coal, iron ore, petroleum gas, and fertilizers has also led to the liberalization of the fertilizer industry.

Finally, there is another benefit of the level playing field in the field of the finance and insurance sector of the economy. This is the fact that foreign direct investment in India has grown tremendously due to the increased demand in the domestic market. Thus, foreign direct investment in India has also led to the liberalization of the economy. This means that the Indian private sector can now enjoy the benefits that are provided by the FDI in the form of thousands of jobs, millions of new businesses, and millions of new investment projects.

As long as the Indian government and the private sectors work hand in hand, the Indian insurance sector can continue to flourish. They will continue to improve the working conditions for the workers, provide better health and dental coverage for the people, and increase the productivity of the workforce. These efforts will allow the sector to eventually rival those of other countries, which have larger oil and gas reserves, greater human capital, and more technological innovation. Thus, the outlook for the Indian economy looks strong, and investment in insurance has certainly paid off for many!

Leave a Reply

Your email address will not be published. Required fields are marked *