Ms. Shikha Sharma started her career in ICICI in 1980 and worked in various divisions of ICICI. She was involved in setting up of I-Sec – a Joint venture between ICICI & JP Morgan and ICICI's personal financial services which includes retail deposit taking, retail credits, credit cards and web trade. ICICI is one of India's largest financial services providers.
Currently she is the Managing Director & CEO of ICICI Prudential Life Insurance Company Limited. She has overall responsibility for all operations of the company.
Personalfn: How do you rate the Budget on a scale of 1 to 10 (with 10 being highest)?
Ms. Sharma : 8/10
Personalfn: What are the 3 budget proposals you found critical from the life insurance perspective?
Ms. Sharma : The budget has expanded the number of people who can avail of tax benefits on their savings by introducing section 80C, which allows one to reduce the taxable income up to Rs 100,000 by saving through specific instruments such as life insurance. Because this is applicable for people across income brackets, many more people can avail of the benefits. Further, the Rs 100,000 limit is significantly higher than the earlier Rs 80,000 limit u/s 88.
Personalfn: What is the one thing that is missing that you wished had been tackled in the budget?
Ms. Sharma : While there has been an increase in the overall limit for savings, a specific incentive for pensions would have been welcome. This really is the need of the hour if one were to save for their long-term and build a substantial retirement kitty. The current limit of Rs 10,000 under Sec 80 CCC (1) is inadequate to build a reasonable retirement kitty.
Personalfn: Benefits under Section 88 and Section 80CCC have been scrapped. Section 80CCE has taken their place. What’s your view on the same?
Ms. Sharma : Benefits for pension policies u/s 80CCC remain. The condition is that the cumulative savings u/s 80C and 80CCC should not be more than Rs 100,000. The simplification of the tax structure and reduction in tax rates is an excellent step and will greatly benefit individuals in computing and assessing their tax liability.
Personalfn: The budget has made a mention about increasing FDI in the pension sector. What kind of impact will this have on the insurance sector?
Ms. Sharma : Both pension and insurance mobilise the long-term savings of the masses, and hence the FDI regulations regarding the same should be similar.
Personalfn: What advice would you offer to the insurance seeker at this stage?
Ms. Sharma : The strategy for a person seeking to buy life insurance need not change. One must conduct a thorough personal finance review, which takes into account one’s current lifestage, future financial goals and risk appetite. Only then can one determine what level of cover they require and how they should allocate their money across different asset classes. Based on this information, one can purchase a policy that best suits him/her.
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