Companies & Sectors
Finance ministry looking at relaxing investment norms for insurers

During their meeting with finance minister P Chidambaram, heads of the PSU insurers pitched for relaxation in investment norms to help the sector earn more premium income

 
New Delhi: The finance ministry is looking at the possibility of relaxing norms for insurance companies to attract more funds for the infrastructure sector as part of efforts to prop-up the sagging economy, reports PTI.
 
During their meeting with finance minister P Chidambaram, heads of the PSU insurers pitched for relaxation in investment norms to help the sector earn more premium income.
 
Talking to reporters after the meeting, financial services secretary DK Mittal told reporters that the issue of channelising their investment into productive sectors, particularly the infrastructure sector, was discussed.
 
“For that what changes are to be made in the regulations by the Government of India or by Income Tax Department ...everything has been looked at,” Mr Mittal said.
 
He, however said no decision was taken and another meeting would be held shortly.
 
“This meeting was not for taking decisions. It was basically for understanding, as a part of a series of meetings that the finance minister (P Chidambaram) is holding with different groups, key groups, what we can do to prop up the economy,” Mr Mittal added.
 
As per estimates, the investment corpus with the life insurance companies is around Rs13 lakh crore. Of this, only 20% currently goes towards the infrastructure sector.
 
As per the current Insurance Regulatory Development Authority (IRDA) norms, insurance companies can invest only in highest rated ‘AAA’ or ‘AA’ credit-rated debt paper.
 
Life insurance companies are allowed to invest up to 50% in government securities, 15% in infrastructure bonds and 35% in other investment grade corporate bonds and equities.
 
“There is a need to revisit investment norms for insurance companies. Will look at revising investment regulations over the next month,” IRDA chairman J Hari Narayan said after the meeting.
 
The regulator is at present mulling options to allow sector companies to invest more in non-AAA rated securities, including ‘A+’ and ‘A’ papers of corporates.
 
 Last year, the Department of Industrial Policy had favoured allowing life insurance companies to invest in greater quantity in non-AAA rated debt instruments to encourage flow of funds to infrastructure projects.
 
India needs about a trillion dollar investment in the infra space during the 12th Five-Year Plan (2012-17).
 

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The Fury of the Monsoons

A first hand photo essay of the Mumbai rains which furiously lashed the city late evening on 3 September 2012.

 
 
As rains lashed Mumbai on 3rd August, I had my first ever experience of the legendary fury of the Mumbai Monsoon which bring this busy metropolis to a grinding halt at least once or twice every season.  This time, it happened in as late as September – a record for Mumbai. 
 
The intensity of the downpour was increasing from 3 pm and by 5 pm we began to get reports that the usual trouble spots of Milan Subway at Santacruz, Hindmata theatre at Dadar and other low lying areas were flooded. We were warned that the intensity of the rains would increase and sure enough it decided to hit Mumbaikars hard when they were returning home. In fact, it really intensified only after 6 pm as we trooped out of office.
 
The flooding of Mumbai has a lot to with the tides and the good news was that the 141.8 mm downpour did not coincide with high tide. 
 
I got into a cab, and rain was pouring blindingly, I just got busy with my iPhone. The cab was crawling along slowly, but at least it was moving.  Then suddenly I rolled down my window and realised that water had reached the door level and was slamming the car.  On the one hand the cab seemed to float on water, on the other there was smoke curling out of the engine and it seemed ready to explode. I quickly paid off the taxi, rolled up my trousers and began to walk towards Bandra.
 
On reaching Bandra, I decided to go up to the Skywalk to get a view of the city struggling to cope with the fury of the rain gods! The city was busy and vibrant as usual. 
 

After a while it seemed as though the intensity had reduced and I joined the long march of people wading to their homes even as the water was slowly draining off.  While people kept moving, the cars weren’t all so lucky. I noticed a Honda Civic and a Toyota stranded in the middle of the road, adding to the chaos.  They were towed away after the water flooding St Paul Road at Bandra had receded. 
 
Three hours later… I was home, a distance that I usually cover in just over 30 minutes. It was a surreal experience and I couldn’t help but wonder what Mumbaikars must have gone through on 26th July 2005 when an intense cloudburst hit the city with deadly ferocity. 

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COMMENTS

Johnson Creado

4 years ago

Seven years back on that July evening, I was stuck in a BEST bus under the Kalanagar flyover at Bandra East. I, along with the other passengers, spent the night in the bus, which had water nearly up to the seat-level.
Passengers ventured out of the bus the next morning when the waters started receding. The WE Highway was full of stranded cars and people walking home. It was an experience to remember.

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