Economy
Debottlenecking of stalled projects underway in India

Due to government policy efforts, debottlenecking of previously stalled projects is underway in India. However, the country needs continuous new investment to create strong foundation for sustainable growth, says Nomura

 

The Increase in revived investment projects that were stalled suggest that debottlenecking of previously stalled projects is underway in India, due to government policy efforts. However, since these revived projects only make up a small proportion of overall investment and therefore, new investment needs to continue to accelerate to create a stronger foundation for sustainable growth, says Nomura.

 

According to the data from Centre for Monitoring the Indian Economy (CMIE), new investment projects announced rose to 12.3% of GDP in Q4 2014 from 8.8% in Q3. On a four-quarter rolling sum basis, investment rose to 7.1 % of GDP from 5.1 % in Q3 2014. 
 
New investment projects announced in the infrastructure sector rose sharply, especially in the air transport, aircraft orders and road sectors. New investment in the manufacturing sector though remains very tepid.
 
Meanwhile, the number of investment projects revived rose sharply to 1% of GDP in Q4 2014 (4-qtr sum) versus a low of 0.2% in Q1 2014, led by a revival in projects in the mining and electricity sectors.
 
Nomura said, "(the data shows) capital expenditure for projects has revived sharp rise. New investment also rose, but it is still at low levels."

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Mediclaim: Use of Tertiary hospitals driving treatment costs higher

Cashless preferred for high cost treatment and medical inflation seen as moderating says the ICICI Lombard 2014 trends report 

 

ICICI Lombard General Insurance has released the key trends for 2014 and its outlook for 2015 for the Health and Motor insurance segments. Here are the important points and Moneylife's comments -  
 
Use of Tertiary hospitals increased from 43% to 49% in case of retail customers which influenced treatment costs. 32% of corporate cases are referred to tertiary hospitals.
 
Including tertiary hospitals (Hinduja, Lilavati, Breach Candy, etc) for cashless is good for consumers, but it can mean that the insured will go to these hospitals even for minor ailments. Insurance companies often overlook smaller nursing homes for including in cashless network, which can push the insured to go for tertiary hospitals.
 
Medical inflation was seen as moderating, especially in the last three years. Mediclaim premium of private and government insurers have drastically increased in recent times and we hope it will pause or increase minimally going forward
 
Cashless route continued to be preferred for high cost treatments. Cashless is an important feature for policyholders. The list of hospitals on cashless network, also known as preferred-provider-network (PPN), varies across insurance companies and is a dynamically changing list. The cashless hospital when you purchased the policy may no longer be on the network after some time. It causes inconvenience to the insured who may buy specific insurer mediclaim product after finding close-by decent hospitals to be on the PPN list. It is disappointing for the insured when the hospital is removed from the PPN list. Moreover, government insurers do not have prominent tertiary hospitals on their PPN in major cities. Recently, Pune, Chinchwad-Pimpri hospitals have stopped cashless for government insurers, retail customers even when group mediclaim customers  continue to enjoy cashless    
 
The key disease trends remained consistent in 2014 led by genito urinary, eye disorders, respiratory disorders, injuries and digestive ailments
 
The pattern was similar for critical illness as neoplasm, metabol ailments, heart ailments continued to dominate
 
Among the key trends likely to emerge/ strengthen in 2015 include:
 
Rising demand for OPD as is evident from initial response in group health segment. Mediclaim covering OPD (consultation, diagnostics) is an expensive product which is marketed for fully utilizing Sec 80D limit of Rs15,000 (Rs20,000 for senior citizens). If an insurer offers mediclaim covering OPD at an affordable premium, then the product will be a success. 
 
Consultation services driving OPD usage at 73%, while diagnostics remains at 27% usage. Insurers can tie-up private primary healthcare providers and general physicians from different cities to offer discounted consultation fees for mediclaim policyholders who may or may not have opted for OPD cover. 
 
E-cashless module will gain prominence in the year ahead
 
Motor Insurance 
 
Impact of natural calamities was clearly evident with 40% increase in claims arising out of storms/cyclones
 
Motor Insurance continued on the growth path, though pace of growth slowed (9.8% in April to November 2014 compared to 17.1% in April to November 2013)
 
Private car sales are being driven by hatchbacks, 40% growth in April to November sales 
 
Bikes segment continued to witness muted demand, scooters (132% growth) provided a silver lining
 
Among the key trends likely to emerge/strengthen in 2015 include:
 
Industry to benefit from road safety measures focused on increasing governance on manufacturers and penalties on violations
 
Introduction of DAIR (Detailed Accident Investigation Report) to reduce reporting time for insurers, waiting time for claimants
 
Usage based insurance, though nascent, may see an uptrend in the coming year

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Arvind Panagariya to be first NITI Aayog Vice-Chairman

The Columbia University professor will take over as the Vice-Chairman of the newly form body, which will come under the PMO

 

Laying to rest and confirming all speculation, the Prime Minister's Office announced today the people who will be a part of the newly formed think thank and Planning Commission successor, NITI Aayog.

 

The body will be headed by the Prime Minister as its Chairman and will have Arvind Panagariya as its Vice Chairman.

 

Following is the list of all appointees as per the PMO statement:


Vice Chairman - Arvind Panagariya, Economist


Full-Time Members

  • • Bibek Debroy, Economist

  • • Dr. V.K. Saraswat, Former Secretary Defence R&D


Ex-officio members

  • • Rajnath Singh, Union Minister

  • • Arun Jaitley, Union Minister

  • • Suresh Prabhu, Union Minister

  • • Radha Mohan Singh, Union Minister


Special Invitees

  • • Nitin Gadkari, Union Minister

  • • Thawar Chand Gehlot, Union Minister

  • • Smriti Zubin Irani, Union Minister

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