About India

Though the modern insurance industry is pretty new but the concept of insurance is not new in India. Indian saints and moral teachers have been giving lessons over the benefits of insurance for an immemorable duration. Raja Manu (Manusmriti). Chanakya (Arthshahtra) and many other saints, philosophers and visionary poets like Tulsidas, Kabir told us about this financial safety measure into their literature. At that time the meaning of insurance was to create a common pool of funds in which all the citizen used to donate a fixed share and that fund would be utilised during any natural disaster or famine.
Insurance sector In India – Indian insurance sector developed considerably during the 1st decade of 21st century. In 1999, foreign insurance companies entered Indian market when Indian government opened its doors for the foreign countries and with a permission to FDI of upto 26% . Before the open market, a government company was the best insurance company in India and even after the incoming of several giant international companies it is still acquiring the peak position.
Life Insurance In India – Life Insurance plans were the wholesole leaders of indian insurance market previously as there were not many products there. There are many companies and many products in Indian market for life insurance. Many companies are specialized in a couple of sections only like Life Insurance & Health Insurance while some others are providing a broad spectrum of products like General Insurance, corporate insurance, Event Insurance, child insurance,  etc alongwith the above said products.
Health Insurance Industry In India – Health insurance industry is the most promising insurance sector in India. Insurance companies are showing great marketing skills & strategies and they are making tie-ups with the leading Hospitals of the country in order to provide world class medical services to their customers during any mishappening. This attraction fascinates people more besides other facilities.

General Insurance In India – Vehicle insurance, house insurance and other similar products are counted in general insurance. It is perhaps the biggest selling product as vehicles are almost compulsarily getting insured by their owners.
Insurance sector has enlarged its reach to every possible corner of possiblity in this modern time. Some big events, special occasions or festivals are also being insured by the concerned authorities now. Biggest examples are the bollywood movies, big entertainment industry awards, fashion shows and even the pilgrims of tough pilgrimages like amarnath yatra, Mansarovar Yatra etc also get themselves insured personally or the government makes a group insurance for them.

India is growing at a massive rate as the number of skilled labour is growing gigantically. This fuels the economic growth as more monies enter the market in the form of taxes, investment loans etc.

However inflation is one aspect that is leading to the economy weakness of India. Surprisingly this year 2007 it dipped to 5.1% in May from the escalated 6.7% close to the estimate of 5% what the RBI had calculated. The rise in inflation is due to the inequalities in supply and demand. Demand is always outfacing supply and this puts the market out of track with increase in prices of special commodities and thus inflation.

In comparison to China, the inflation rate is as low as 3%. Although its interest rates remain lower than India. However it is able to control the inflation rate through sterilisation. In this process it sterilises the impact of money on reserves, while its central bank pays a meagre interest of 2% on bills that local domestic banks are made to purchase. On the other hand it earns a handsome amount on the American Treasury bonds, hence it is in profit and sterilisation is a profitable measure.

In India with the increasing deficits in the yearly income from the government and the high rate of interest it has to pay the banks, the debit does not offset the credit from the American Treasury bonds hence sterilisation of monies is not a profitable resource.

However with the burgeoning workforce the GDP is said to gain momentum in the next decade. This 2007 itself it GDP grew by 9.4%, the best ever in the past 18 years. While the current price of GDP in India is said to overtake Italy and France by 2020, other European countries like Germany, UK by 2025 and by 2035 Japan. By then it is expected to be the third largest economy following US and China.

By 2025 India’s growing economy will be about 60% of America’s and hence making it the 3rd largest economy. If it works equally harder within a decade it can overtake the UK’s GDP contribution. But then again it has to measure its worth within the country. Reduce the pressure on agriculture and give it more benefits, as around 40% of the income is lead by agriculture. Various other industrial and residential reforms along with a reduction in house renting rates have to be reduced to bring more satisfaction to the common man and indirectly healthy economic growth.