Opinion | The Will. The Witness. And the Will Party

When you get to the stage that there are more funerals and prayer meetings than birthday parties to attend, you know that you have crossed the line that marks the declivity towards death. At the after-meal at one such prayer meeting in the home of a close relative, the post-lunch groups broke age-wise into huddles. While the generation Z was in one room bent over their devices, each communicating with other gen Zs, the over 70s were in another room, heads close together. We, in-betweens, looked after both before our own huddle. After two decades of work, the extended family has finally accepted the fact that I might know a bit about money and finances. So, I am summoned to the old gang to discuss Wills —“Monika ko bulao,” rings the command from the eldest silver. As I wade in, I find the group divided down the middle. One set is vociferous in their pro-Will stand and recommends handwritten Wills over an online standard format. The other group looks suspicious. They fear two things and are over-confident of a third. One, the acceptance of their end of time. Two, the fear of the kids not looking after them once the assets are earmarked. Three, they are confident that their kids will not fight over assets—however big or small—and that a Will is needed only if there is a dispute. “My kids will never fight” is almost a statement of faith about their own parenting skills.

 

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Opinion | Making sense of the business of life insurance

The Life Insurance Corp. of India (LIC) has been a partner of middle-class India for decades in building an annual saving habit towards a future corpus. Its army of agents provided doorstep service to millions of Indian investors at a time when there were few long-term corpus-building financial products in the country. But the feature of a monopoly, and that too owned by the government, is that it is slow to take note of change and upgrade processes and practices. The post-2010 Indian financial sector is very different from the 1980s and even 1990s with modern financial products and mark-to-market practices on equity, bond and loan valuations to ensure transparency and fairness. As of 31 March 2019, LIC managed almost 80% or ₹27.61 trillion of Indian household money in the life insurance sector, and had an annual premium book of just over ₹3 trillion in 2018-19, that’s about 66% of the total market. As this behemoth, also used by the government of the day to bail out its stock and bond paper, which carries a sovereign guarantee gets ready to list on the stock market, it is important that the business of life insurance is better understood by policyholders, investors and commentators.

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Opinion | The FM needed to go beyond just good intentions. They are not enough

A too-long budget speech that was abruptly cut short, budget proposals that disappointed markets and income tax paying Indians. A fatigue with more good intentions rather than a big push for real change. That’s the story of Budget 2020.

The 35 million Indians who bear the disproportionate burden on income tax in India were waiting to get something from this budget. The dual tax system announced by the FM looks at a lower tax regime for those who are willing to give up on the deductions and exemptions. People with incomes up to ₹15 lakh a year benefit if they give up on their tax breaks and pay a lower rate. The FM said that they will gain up to ₹78,000 a year. Though if you add the common deductions, this number changes to the negative. It gets worse for those with incomes over ₹15 lakh if they move to the new tax regime. According to the FM, the state is letting go of about ₹40,000 crore of revenue due to this—or this is the money in the hands of the people if everybody migrates to the new system. But it does not seem that everybody will move since the benefits are not clear at all. It does look like the government has not thought this proposal through and not counted all the deductions that an average household avails. Start adding the others and the move to the new tax regime is not recommended because it leaves you worse off.

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