Dr KP Krishnan may soon join the prime minister's Economic Advisory Council (EAC) as secretary. Besides advising on policy matters referred to the Council from time to time, the EAC also prepares a monthly report on economic developments both in India and abroad
Dr KP Krishnan, joint secretary of capital markets in the finance ministry, may soon join the prime minister's Economic Advisory Council (EAC) as secretary. According to sources, Dr Krishnan is likely to be replaced by Dr Thomas Mathew, the deputy director general of the Institute for Defence Studies and Analyses (IDSA).
Dr Krishnan, who belongs to the 1983 Indian Administrative Service (IAS) batch, had earlier worked as managing director, Karnataka Urban Infrastructure Development and Finance Corporation, and secretary for Urban Development and secretary for Finance Department, government of Karnataka. He has also worked as advisor to the executive director of the World Bank in Washington, DC.
Dr Mathew is also an officer from the 1983 IAS batch. Earlier, he had held several positions in the ministries of information & broadcasting, petroleum & natural gas, industries and defence— amongst others. He has been working at the IDSA since 2007.
The EAC to the prime minister was constituted on 29 December 2004. Dr C Rangarajan is the current chairman of the PM's EAC.
Apart from providing advice on policy matters referred to the Council by the PM from time to time, the EAC also prepares a monthly report on economic developments both in India and abroad for the PM. It monitors economic trends on a regular basis and brings to the PM’s attention important developments and suggests suitable policy responses.
Faced with increasing claims, insurance companies are planning to hike premiums for own-car insurance
If you’re thinking of insuring your spanking new car, be ready to shell out more for your own-car insurance. That’s because general insurance companies, which have been hit hard by the double whammy of rising claims and shrinking premiums (due to cutthroat competition after motor insurance was de-tariffed in January 2007), are gearing up to increase premiums for coverage against loss or damage to your vehicle, also called as ‘own-car’ insurance.
“They (motor insurers) are expected to increase their premiums based on the region and their own past experience of various car brands,” said Raj Bora, IFFCO-TOKIO’s vice president for management and corporate planning.
Motor insurance is the biggest revenue earner for non-life insurers, with nearly 60% of their sales coming from this segment. But ironically, it has also been the biggest drag on their profitability due to rising claims from motorists, both for own and third-party damages. While insuring one’s own vehicle from loss or damage is optional, third-party insurance—which covers you against liabilities if you were to get into an accident involving someone else’s vehicle—is mandatory for every automobile.
With underwriting parties making losses, prices of premiums having come down in the past and with claims rising—all since the de-tariffing of the industry in January 2007, insurance companies have decided to raise their premiums.
Since January 2007, insurance companies were allowed to sell their motor insurance premiums at a lesser rate and provide discounts to their customers, after an Insurance Regulatory and Development Authority (IRDA) order.
However, with falling premium levels and discounts being given to clients, the claim ratios increased, especially on small cars, mid-sized cars and sports utility vehicles (SUVs).
S Sreenivasan, Bajaj Allianz’s chief financial officer said that since January 2007, there was nearly a 40% drop in motor-insurance premiums by insurance companies.
“When de-tariffing of motor insurance took place, the prices fell down tremendously. However, this itself could not be sustained. The simple fact is that claims itself have continued to rise because of inflation,” said Kim Soon, chief operating officer of Bharti AXA General Insurance.
He also added that the structure of motor insurance premiums in the country has added to the problems facing the industry. “In India, if the vehicle is new then the insured declared value (IDV) attracts a higher premium. However, when the vehicle becomes old, then the IDV comes down. Yet, when it comes to claims, the claims cost doesn’t come down.”
Luxury car owners may not have to worry about increase in own-car premiums, because the amount being charged as own-car premium is already high for such vehicles.
For a low-end vehicle like the Maruti Alto which has an average ex-showroom price of Rs2.70 lakh, Bharti AXA has increased its premium for own-car insurance to Rs10,000 from Rs8,500 over the past three-four months.
In the future, insurance companies are also likely to become stricter while settling claims. If you have a bad claims record, then your motor insurance premiums are likely to rise.
With the rising amount of theft in the northern region and increasing amount of accidents in states like Uttar Pradesh and Punjab, insurance companies say that such areas may have to face higher premiums compared to other regions. This region could actually see a rise of own-car motor insurance premiums by at least 5% to 15%, said Ajay Shah, vice president, customer service-motor, ICICI Lombard General Insurance.
The government will mop up Rs70,000 crore from the auction, double the amount it expected to collect
Auction for third generation (3G) licence ended today, with bids for the pan-India licence touching Rs16,828 crore that ensures the government a revenue of Rs70,000 crore—double the amount it expected to collect, reports PTI.
According to sources, Bharti, Idea and Vodafone Essar have won in some of the circles in the auction that lasted 34 days. However, details of who have secured all-India licence are awaited.
As per the latest figures, the pan-India licence bid touched Rs16,828 crore compared to the reserve price of Rs3,500 crore.
With the close of auction for 3G telephony spectrum, the government would commence the auction for Broadband Wireless Access (BWA) spectrum in two days.
Nine leading mobile operators, including Bharti Airtel, Vodafone, Reliance Communications (RCom) and the Tatas, had entered the auction to grab spectrum for 3G services, which would allow users to access high-speed data downloads on mobile phones.
Slots were only available for three operators in most states, while four were available in Punjab, Bihar, Orissa, Jammu and Kashmir and Himachal Pradesh.
The government had estimated raising Rs 35,000 crore from sale of spectrum for 3G as well as Broadband Wireless access (BWA) put together.
But with auction for BWA spectrum yet to begin, the revenue mop up could go up further.
Besides Delhi and Mumbai, Bharti has got 3G spectrum in Andhra Pradesh, Karnataka, Tamil Nadu, UP (West), Rajasthan, West Bengal, Himachal Pradesh, Bihar, Assam, North East and Jammu and Kashmir.
The company, however, lost out in Punjab, from where company promoter Sunil Mittal hails.
RCom would be able to offer 3G mobile services in Rajasthan, Madhya Pradesh, West Bengal, Himachal Pradesh, Bihar, Orissa, Assam, Kolkata, Punjab, North East and Jammu and Kashmir, other than Delhi and Mumbai.
Vodafone-Essar has succeeded in Maharashtra, Gujarat, West Bengal, Tamil Nadu, Kolkata, Haryana, UP (East). The telecom major also bagged Delhi and Mumbai.
Tatas, who have been denied 2G spectrum in Delhi, also lost out on 3G spectrum in Delhi. They, however, managed to get a slot in Maharashtra, Gujarat, UP (West), Rajasthan, Karnataka, Kerala, Punjab and Haryana.