India Union Budget 2013-2014: Multi-pronged approach for insurance penetration

New Delhi, Feb 28 (IBNS) The government will follow a multi-pronged approach to increase penetration of insurance-both life and general- in the country, said Union Finance Minister P Chidambaram while presenting the Union Budget 2013-14 in the Parliament on Thursday.

He said a number of proposals finalized in consultation with IRDA are being implemented. Insurance companies will now be allowed to open branches in tier II cities and below without prior approval of the IRDA.

The banks will be permitted to act as insurance brokers so that full network of banks will be utilized to increase penetration.

The banking correspondents will be allowed to sell micro-insurance products. The KYC of Banks will be sufficient for purchase of insurance policies.He added that LIC and atleast one other public sector general insurance company will have an office in towns with a population of 10,000 or more by 31st March, 2014.

The Rashtirya Swastha Bima Yojana which covers 34 million families below poverty line is proposed to be extended to cover other categories such as rickshaw, auto rickshaw and taxi drivers, sanitation workers, rag pickers, and mine workers. 

The Rural Housing Fund set up through National Housing bank which refinances lending for rural housing will be provided Rs 6000 crore as against Rs 4000 crore provided last year. In view of the shortage of houses it is proposed to start a fund for housing in urban areas. 

The National Housing Bank will be asked to set up the fund and Rs. 2000 will be provided for it in 2013-14.

Championing the idea of an integrated social security package for the unorganized sector he said an integrated and comprehensive package including life cover cum disability, health cover, maternity assistance and pension benefits will immensely help the poorest and most vulnerable sections of the society. 

The present schemes such as AABY, JSBY, RSBY, JSY, IGMSY are run by different Ministries and it is proposed to converge them and evolve comprehensive social security package.

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