Issue: 2 In-house magazine of FCFP members November—December 2022

OPPORTUNITIES FOR
INDIA FROM
RUSSIA UKRAINE
WAR
LIC PLANS
OWN DEPOSITORY

INDIA’S
JUMP IN
DEFENSE
EXPORTS

JOURNEY OF
ISRO

National
Logistic
Policy

1
INGENIOUS Nov-Dec 2022

… the

P rogression

T he concept of level premium is explained in the

below chart, for a term assurance policy. If you
consider the YOY (year on year) Premium then the pre- Mr. Ankur Shah
mium moves from A to B. Whereas, what is charged to
Qualified on
the life assured is CD. 28-Aug-2022

LEVEL PREMIUM Ms. Bharathi

Srinivasan
Qualified on
29-Sep-2022

Mr. Ashok Sutar

Qualified on
30-Sep-2022
The area AXC shows the excess amount of the level pre-
miums paid prior to age 45; the area BXD represents the
deficit in premiums after that age. You will notice that
area BXD is much larger than the AXC. The disparity in Mr. Ajay Tyagi
the size of the two areas is attributable to the fact that the
sums represented by the area AXC, which represent the Qualified on
reserve under the contract, are invested at compound
30-Sep-2022
interest, and the interest earnings are subsequently used
along with the principal sum to supplement the inade-
quate premiums of the later years. Mr. Keshav
The reserve is completely exhausted at age 65 (the end of Agrawalla
coverage), having been used to pay the death claims sub-
Qualified on
mitted under this group of policies. The reserve, includ- 07-Oct-2022
ing the investment earnings derived from them, is grad-
ually used up after age 46 in the process of supplement-
ing the deficient level premium. The reserve under this
Mr. Suresh
contract—term to 65, issued at age 25—reaches its maxi-
mum size at age 53, diminishing thereafter at an acceler- Kumar Arora
ating rate until exhausted at the end of the policy period. Qualified on
The YOY premium AB repre- 09-Oct-2022
sents the year on year how the
premium will vary according to
the increasing age for that Mr. Amit Sarang
group of policyholders.
Qualified on
R. Gopinath 29-Oct-2022

2
INGENIOUS Nov-Dec 2022

D a t a C e n t re
Latest Policy Rates (Source RBI website) as at 01:30 pm on 11-Nov-2022
Policy Rates Reserve Ratios Exchange Rates Lending / Deposit Rates
8.10% -
Policy Repo Rate 5.90% CRR 4.50 % INR / 1 USD 80.66 Base Rate
8.80%
Standing Deposit Facility 7.05% -
5.65% SLR 18.00 % INR / 1 GBP 94.29 MCLR (Overnight)
Rate 8.05%
Marginal Standing Facili- 2.70% -
6.15% INR / 1 EUR 82.47 Savings Deposit Rate
ty Rate 3.00%
INR / 100 Term Deposit Rate > 1 5.50% -
Bank Rate 6.15% 56.96
JPY Year 7.25%
Fixed Reverse Repo Rate 3.35%

Money Market 11-Nov-2022 GDP (US$ million) by country

Call Rates 4.10% - 5.95% * IMF
* as on previous day Sr. No. Country/Territory UN Region
Estimate Year
Government Securities Market World — 10,34,96,115 2022
7.26% GS 2032 7.3462% # 1 United States Americas 25,035,164 2022
6.54% GS 2032 7.3807% # 2 China Asia 18,321,197 2022
7.38% GS 2027 7.2747% # 3 Japan Asia 4,300,621 2022
5.74% GS 2026 7.2187% # 4 Germany Europe 4,031,149 2022
6.69% GS 2024 7.0396% # 5 India Asia 3,468,566 2022
4.56% GS 2023 6.8642% # 6 United Kingdom Europe 3,198,470 2022
91 day T-bills 6.4764%* 7 France Europe 2,778,090 2022
182 day T-bills 6.8195%* 8 Canada Americas 2,200,352 2022
364 day T-bills 6.9800%* 9 Russia Europe 2,133,092 2022
* cut-off at the last auction 10 Italy Europe 1,996,934 2022
#
as on end of previous working day 11 Iran Asia 1,973,738 2022
Capital Market 12 Brazil Americas 1,894,708 2022
S&P BSE Sensex 606133.70 * 13 South Korea Asia 1,734,207 2022
Nifty 50 18028.20 * 14 Australia Oceania 1,724,787 2022
* as on previous day 15 Mexico Americas 1,424,533 2022
Latest Small Savings Schemes Rates

Compounding
Instrument Rates %
Frequency

Savings Deposit 4.0 Annually

1 Year Time Deposit 5.5 Quarterly
2 Year Time Deposit 5.7 Quarterly
3 Year Time Deposit 5.8 Quarterly
5 Year Time Deposit 6.7 Quarterly

5 Year Recurring Deposit 5.8 Quarterly

Senior Citizen Savings Scheme 7.6 Quarterly & paid

Source MOSPI (Government of India Ministry of
Monthly Income Account 6.7 Monthly & paid Statistics And Programme Implantation)

National Savings Certificate 6.8 Annually US Fed Rate 3.82% (After a 0.75% hike on 2nd November, 2022
Fed meet)
PPF 7.1 Annually
10 Year US Bond yield 3.828% (As on 10.11.2022 after release
Kisan Vikas Patra of latest CPI Data)
7.0 Annually
(Matures in 123 months)
US CPI 7.70% (As on 10.11.2022) compared to 8.2% Septem-
Sukanya Samriddhi 7.6 Annually ber’s rate. (Target Inflation 2%)

3
INGENIOUS Nov-Dec 2022

ANKUR SHAH
Cover Story
1st announced in 2019-20 budget by Honorable FM jects regular- ly and
will facilitate the removal
Nirmala Sitharaman. But it was delayed due to COVID-19
pandemic. Again, announced in 2022-23 budget. Officially of any hurdle.
announced on 17th Sep 2022 by hour honorable Prime Minis- Benefits of new policy
ter Shri Narendra Modi on his birthday.
 Reduce the cost of lo-
India finally has a National Logistics Policy (NLP). The policy gistics from 14-18 per-
aims to achieve, among others, ‘quick last-mile delivery, end cent of GDP to global
transport-related challenges, save time and money of manu- best practices of 8 per-
facturers, and prevent wastage of agro-products. The end cent by 2030. Countries
result is significant time and the cost reduction.’’ like the US, South Ko-
India will integrate 30 systems belonging to different minis- rea, Singapore, and
tries to create an integrated digital logistics system for fast- certain European na-
er, cheaper and safer logistics services. tions have such a low logistics cost-to-GDP ratio. Assum-
The policy introduces an integrated digital system (IDS) that ing the current cost is 16 percent of GDP, that would
will bring on one platform departments belonging to minis- mean that logistics costs have to be cut by half to be near
tries of road transport, railways, customs, aviation, foreign global benchmarks by 2030, assuming the global bench-
trade and commerce. All these departments have their own mark does not improve further.
digital data which will be integrated under IDS. This will help  Improve the country’s Logistics Performance Index (LPI)
ranking to be among top 25
countries by 2030. India
ranked 44th in 2018. This is
not ambitious enough. India is
the fifth largest economy in
the world. If it has to move
fast to be among the three
largest economies and join
the league of developed na-
tions, it has to aim to be
among the top 10 in the LPI
by 2030. It has to match the
pace of South Korea.

smooth cargo movement.  Create data-driven deci-

KEY BUILDING BLOCKS sion support systems (DSS) to enable an efficient logistics
ecosystem. This is key. The DSS was needed yesterday,
Integration of Digital System (IDS) and time is running out fast.
This system will look forward to integrating 30 different sys-
tems of seven different departments, which are road  The policy’s target is to ensure that logistical issues are
transport, railway, customs, aviation, foreign trade, and minimized, exports grow manifold, and small industries
commerce ministries. The digital data from these depart- and the people working in them benefit significantly.
ments will be integrated under IDS. This will directly affect Finally,
shorter cargo movement in a positive way. strengthen-
Unified Logistics Interface Platform (ULIP) ing the logis-
The most important building block is the Unified Logistics tics sector
Interface Platform (ULIP), which aims to collapse all logistics will not only
and transport sector digital services into a single portal, make it easi-
thereby freeing manufacturers and exporters from the pre- er to do busi-
sent tyranny of long and cumbersome processes. ness, but also
to generate
Ease of Logistics (ELOG) substantial
Under this, the new policy will simplify the rules, which is employment
expected to simplify basic business. A new digital platform. and ensure
This will allow industry to directly take up operational issues improvement
with government agencies for speedy resolution. in wages and
System Improvement Group (SIG) working con-
This system will be used to monitor all logistics-related pro- ditions.

4
INGENIOUS Nov-Dec 2022

Businesses can protect their financial losses

due to non payment by the debtors. This is
covered through:

TRADE CREDIT INSURANCE

The insurance covers non payments by
debtors due to:
 PROTRACTED DEFAULTS
(wilful defaults)
 Insolvency of the debtor
 Political Risks
Contributed by - Inderpal Singh Bindra
The inured (Seller), the business is lever-
aged and protected towards above losses
and can focus on growth of the organisation
with confidence.

Good team work can achieve

impossibly huge dreams beyond
even the sum total energies
of the individuals’
due to the inestimable synergy,
the team generates.
-rg

5
INGENIOUS
S amac ha a r
LIC mulls starting
own depository
What is demat form of insurance
policy?
Dematerialisation or 'Demat' allows a
policy holder to create a portfolio of in-
surance policies and store them in an
electronic form with an insurance reposi-
tory. It has been introduced by IRDAI as
a similar facility to the one available for
stocks
What is EIA?
'e-Insurance Account' (eIA) is the portfo-
lio of insurance policies of a proposer/
policyholder held in an electronic form
with an insurance repository. This e-
Insurance account facilitate the policy-
holder by providing access to the insur-
ance portfolio at a click of a button
through internet. This will help eIA hold-
er to keep a track of insurance policies
(life as well as non life) under one um-
brella.
Dematerialisation of insurance policies
will streamline access, support, as well as
expedite claims by collating all infor-
mation of all insurance policies of an
individual – life, health, travel, motor and
group at one single place. e-KYC to be-
come mandatory from November 1
The Insurance Regulatory Development
Authority of India (IRDAI) has mandated
dematerialisation of new insurance poli-
cies by this year-end. It has urged all
insurance companies to dematerialise
their existing or old policies by Decem-
ber-end, industry experts have said.
In a move to make the dematerialisation
process of insurance policies faster, e-
KYC will also become mandatory for all
insurance policies, starting November 1,
2022. Insurance policies could be dema-
terialised with National Securities Depos-
itory Limited (NSDL), Central Deposito-
ry Services Limited (CDSL) or Karvy
The Life Insurance Corporation (LIC) is
considering starting its own depository
for insurance dematerialisation,
"LIC’s insurance depository could be a
separate subsidiary. This would reduce
demat expense for LIC. They would also
earn income via dematerialising insur-
ance policies for other insurers," sources
said.
LIC is also planning to ask Insurance
Regulatory and Development Authority
of India (IRDAI) to relax timeline for
5G connectivity in INDIA launched
I
ndia launched 5G telephony ser-
vices in select cities on 1st Oct
2022. PM Narendra Modi launches
the first phase of 5G services in 13
cities across India in Pragati Maidan,
New Delhi. The launch took place during
the four days inauguration of India's big-
gest technology festival India Mobile
Congress (IMC) 2022.
It is expected that the next generation
high-speed 5G services will bring funda-
mental changes across several sectors,
including education, health, Agriculture
and banking. India now joins a select set
of countries that offer 5G telephony and
these include the US, Korea, UK, Japan,
dematerialisation of new and old insur-
ance policies.
The insurance regulator has mandated
dematerialisation of new insurance poli-
cies by December 2022. The insurance
regulator has also asked insurance com-
panies to dematerialise existing/old poli-
cies by December 2023.
As far as the expense incurred on dema-
terialization of policies for LIC is con-
cerned, LIC has around 75 percent mar-
ket share when it comes to total insur-
ance policies in the industry. It issues
nearly two crore policies each year.
 LIC to speak to IRDA on plans to
start own depository for Insurance
Dematerialisation
 LIC’s Insurance Depository could
be separate subsidiary
 Having its own Insurance deposito-
ry could reduce demat expenses for
LIC
 LIC could also earn income via
dematerialising insurance policies
of other insurers
 LIC to ask IRDA to relax timeline
for dematerialisation of new and
old insurance policies
Nov-Dec 2022
China, and nations across Europe.
5G technology is expected to deliver ten
times better download speed than that of
4G and up to three times greater spec-
trum efficiency. With this,
the stage is set for the mobile
subscribers in the country to
get 5G services in the coming
months. The 5G services in
India is rolled out in select
cities and will be expanded to
the entire country over the
next couple of years.
Reported by - K.M.S. Sri Ram
Also there
are 22
crore poli-
cies which
are active
and exist-
ing belong-
ing to LIC
in the industry today. So, if this was to
be done through a different subsidiary,
let's say a CAMS or National Securities
Depository Limited (NSDL), Central
Depository Services (CDSL), then LIC
would have incurred around Rs 1,200
crore to Rs 1,400 crore on dematerializa-
tion of policies.
But, now that money will be coming to
its own subsidiary, LIC will also be al-
lowed to take dematerialization business
from other life insurance companies and
other insurance companies.
Dematerialisation means converting
physical policy document into a modifia-
ble online object. It means that a person
will no longer need to indulge in paper-
work at time of renewing the policy. It is
aimed at reducing transaction costs and
also ensuring swift modifications in poli-
cies.
Reported by - J. Dwarakanath
6
INGENIOUS
Opportunities for INDIA
from Russia—Ukraine
P ost collapse of Union of Soviet Socialist Republics
(USSR) in the early 1990s and thereafter, many years
of economic struggle and internal strife, the leader-
ship of President Vladimir Putin finally ensured that Russia
is now seen as an energy giant becoming the world’s third-
largest producer of oil and second-largest producer of natural
gas. Russia is learnt to have used energy revenue to accumu-
late some $630 billion in foreign exchange reserves. . For
example, in the year 2021, Russia balanced its budget with a
relatively low oil price at $45 per barrel against an average of
nearly $70 a barrel.
While Russia depends on revenue from Europe, the latter
depends on supply of energy from Russia. Overall, Russia
was supplying about one-third of European natural gas con-
sumption, used for heating in the winter as well as electricity
generation and industrial production. The EU also depends
on Russia for more than one-quarter of its crude oil imports.
Russia had, thus, turned out as the largest single energy
source for this bloc of Nations.
Due to this inter-dependence, imposing tougher sanctions on
Russia is going to make a serious dent in its energy supplies
and thus eventually the dependent European countries will be
the sufferers. In fact, few EU States are far more dependent
than others. While Portugal and Spain use little Russian ener-
gy, Germany, the largest European economy, was getting
more than half of its natural gas and over 30 percent of its
crude oil supplies from Russia. France gets most of its elec-
tricity from nuclear energy.
Nord Stream pipeline that was commissioned in2011 not
only inflicted an annual loss of $720 million in transit fees on
Ukraine, but also significantly increased Germany’s depend-
ence for energy supply on Russia. By the year 2020, Russia
began to supply to Germany an estimated 75 percent of its
natural gas, up from 35 percent in 2015. Natural gas is wide-
ly required in Germany to run the power industry, meet with
heating requirements as also to generate electricity for exten-
sive use in the country.
Read more at:
https://economictimes.indiatimes.com/news/defence/view-
the-root-cause-of-the-ukraine-conflict/
articleshow/89807225.cms?
utm_source=contentofinterest&utm_medium=text&utm_cam
paign=cppst
EFFEECT ON WORLD ECONOMY
The Russia-Ukraine war is having an outsized impact on the
global supply chain, impeding the flow of goods, fueling
dramatic cost increases and product shortages, and creating
catastrophic food shortages around the world, according to
experts at a virtual symposium hosted by the MIT Center for
Transportation (Source: Google)
Nov-Dec 2022
Sa ma c h a ar
WAR
Economic activity will remain deeply depressed through next
year, with minimal growth of 0.3% expected in 2023, as en-
ergy price shocks continue to impact the region. So far, how-
ever, the region has weathered the storm of Russia’s invasion
of Ukraine better than previously forecast. Regional output is
now expected to contract by 0.2% this year, reflecting above
expectation growth in some of the region’s largest economies
and the prudent extension of pandemic-era stimulus pro-
grams by some governments.
(Source: worldbank.org)
EFFECT ON EUROPE
Since the beginning of the war, Europe has undergone a mas-
sive strategic evolution, unthinkable until nine months ago.
European nations buried deep differences and stood united as
liberal democracies against Vladimir Putin’s aggression.
They are now more committed to strengthening NATO and
its premise of collective security and to the transatlantic part-
nership with the US than at any other time after World War
II. Finland and Sweden are set to join the security grouping.
The decision by Berlin to shed seven decades of pacifism to
strengthen its army, make more weapons, and send arms to
Kyiv was a turning point. The EU has relaxed its immigra-
tion laws to accommodate refugees from Ukraine. Britain,
one of Ukraine’s most vocal supporters, is an important
member of the western alliance — but it is Eastern European
EU members such as Poland, which usually do not have a
voice, that are playing a proactive role
(Source: The Indian Express)
EFFECT ON UK
The UK is less exposed to the direct trade effects of Russia’s
invasion of Ukraine than its European neighbours. However,
both the indirect and longer-term effects on UK trade are
potentially significant. This briefing paper explores the four
main impacts for UK trade.
Despite the UK’s relative strength in terms of energy and
food security, and its limited links to supply chains involving
Ukraine, global inflationary pressure caused by the war will
contribute to substantial domestic price rises. This upward
pressure will only add to the existing effects of both Brexit
and the COVID-19 pandemic on the UK economy. Mean-
while, increased scrutiny of Russian and other foreign inves-
tors in London – coupled with UK and Western sanctions on
individuals and companies with links to the Kremlin – could
impact inward investment through legal restrictions on busi-
ness or by indicating to overseas investors that the UK is an
unsafe location for their money.
(Source: Chatham house.org)
more on page 9
7
INGENIOUS
“One fine difference between human beings and
others, is our capacity to change the level of our
lives at our will.”
HIGHLIGHTS OF THE JOUR-
NEY FROM 1963 TILL DATE
In 1963, ISRO team with 5-6 scientists
didn’t had much experience and were
sent for training at NASA. They al-
ready had theoretical knowledge but
least practical experience. In 1964 they
initiated their own self learning mod-
ule. In 1975 ISRO launched their 1st
satellite Aryabhatta Satellite from Rus-
sian space. In August 1979 SLV was
launched but it wasn’t a successful one
and fell into the sea. They promised
that within one year they will make a
successful launch. As promised, within
11 months; on 18th July 1980 they suc-
cessfully launched SLV 3, Rohini in
space and then onwards the rest is his-
tory.
Today in many areas ISRO stands 6th
in the world, in some areas it is 3rd in
the world and in few aspects ISRO is
1st in the world.
ISRO sent a lunar orbiter, Chan-
drayaan-1, on 22 October 2008, which
discovered lunar water in the form of
ice, and the Mars Orbiter Mission, on
5 November 2013, which entered Mars
orbit on 24 September 2014, making
India the first nation to succeed on its
maiden attempt to Mars, as well as the
first space agency in Asia to r each
Mars orbit. On 18 June 2016, ISRO
launched twenty satellites in a single
vehicle, and on 15 February 2017,
ISRO launched one hundred and four
satellites in a single rocket (PSLV-
C37), a world record. ISRO launched
its heaviest rocket, Geosynchronous
Satellite Launch Vehicle-Mark III
(GSLV-Mk III), on 5 June 2017 and
placed a communications satellite
GSAT-19 in orbit. With this launch,
ISRO became capable of launching 4-
ton heavy satellites into GTO. On 22
July 2019, ISRO launched its second
lunar mission Chandrayaan-2 to study
the lunar geology and the distribution
of lunar water.
LVM3 M2/OneWeb India-1 Mis-
sion is completed successfully.
All 36 satellites are placed into
their intended orbits
In its second operational flight, LVM3
launch vehicle placed 36 satellites of
OneWeb to their intended orbits taking
off at 0007 Hrs. on October 23, 2022,
from the second launch pad at Satish
Dhawan Space Centre, Sriharikota,
Andhra Pradesh. This was the fifth
flight of LVM3.
This was the fifth flight of LVM3.
This was a dedicated commercial mis-
sion for a foreign customer through
NSIL. A total of 36 OneWeb Gen-1
satellites of about 150 kg each totalling
about 5,796 kg were launched to a
circular low-earth orbit of about 601
km with a87.4 degree inclination. The
separation of satellites involved a
unique maneuver of the cryogenic
stage to orientation and re-orientation
covering 9 phases spanning 75
minutes. OneWeb confirmed the ac-
quisition of signals from the satellites.
OneWeb Gen-1 satellites utilize a bent
-pipe technology approach to offer
communication in Ku-band and Ku-
bands. They are arranged in 12 orbital
planes with 49 satellites in each plane
at 1200 km.
Calling the launch of LVM3 M2 a
historic event, Shri S. Somanath,
Chairman, ISRO lauded the synergetic
efforts between ISRO, NSIL, OneWeb
Nov-Dec 2022
Sa ma c h a ar
in realizing the mission in a record
time. He specifically acknowledged
the design and development of an iner-
tial navigation system at LPSC for C25
operations.
This was one of the biggest commer-
cial orders executed by ISRO. With
this launch, the LVM3 enters into
global market in a gr and manner .
Key Highlights from Joint Press-
release by ISRO, NSIL and One-
web
36 OneWeb Satellites Successful-
ly Launched by ISRO/ NSIL
from Sriharikota
 All 36 satellites are operational,
bringing OneWeb's total Gen 1
LEO constellation to 462 satel-
lite
 Launch from Satish Dhawan
Space Centre SDSC-SHAR,
Sriharikota, India marks the
first dedicated commercial
launch for NewSpace India
Limited (NSIL) using LVM3
rocket
 With this successful launch, the
LVM3 has become a catalyst
for the Indian Space Pro-
gramme, opening new vistas for
heavy payloads to the LEO
 Activates new phase of launch
programme for OneWeb, with
global coverage planned for
2023 and connectivity solutions
north of 50-degrees latitude
already live.
Reported by - Savita Pillai
8
INGENIOUS Nov-Dec 2022

Sa ma c h a ar
Net Direct Tax collection
FY 2022-23 up 23% at ₹700,669 cr

D
irect tax collections continue to increase at a rapid
rate, according to a statement from the Central
Board of Direct Taxes. This is an obvious sign of
the post-pandemic recovery of economic activity,
particularly as a result of stable policies emphasising process
simplification and streamlining as well as the plugging of
revenue leaks through efficient use of technology.
Net Tax Collection:
According to a statement from the CBDT, net direct tax re-
ceipts for the first half of current fiscal year are at 700,669
crores, up 23% from 568,147 crores for the same period last
year. The sum includes personal income tax (including secu-
rities transaction tax) at 330,490 crores and corporation tax
worth 368,484 crores.
Gross Tax Collection:
According to the CBDT statement, the total amount of direct returns increased this fiscal year, about 93% of the properly
taxes collected to date (before accounting for refunds) is verified ITRs filed for the year had been done so. "This has
$836,225 crores, up from $642,287 crores during the same led to the faster issue of refunds with almost a 468 percent
period the previous financial year, a 30% increase. The gross increase in the number of refunds issued in the current finan-
collection also includes corporation tax, which is worth cial year," it continued, adding that as a result, refunds total-
$436,020 crore, and personal income tax (PIT), which in- ling 135,556 crores have been issued so far compared to re-
cludes securities transaction tax (STT), which is worth funds of 74,140 crores being issued during the corresponding
$398,440 crores. period in the preceding financial year 2021–2022, showing a
growth of around 83%.
It is important to note that the processing time for income tax
Reported by - Keshaw Agrawalla

BIMA SUGAM – New Initiative towards digitalization

I
nsurance Regulatory and Devel-
opment Authority of India
(Irdai), recently announced the
launch of Bima Sugam—an
online market place that will provide a
common platform for all companies
selling life and non-life insurance.
The portal is scheduled to go live
from 1 January 2023.
The online platform will provide
you with a one-stop destination for
all insurance needs – life & non life,
providing services like buying in-
surance policies, portability facili-
ties form one insurance company to
another insurance company, settling
of claims and change of insurance
agents. It allows buyers to compare
and choose the product features and
pricing and purchase life, motor or
health insurance policies directly or
through their agents. Bima Sugam
platform will provide all these facili-
ties to policyholders with an e-
insurance account (e-IA).
The Bima Sugam will leverage the
prospect of having a centralised data-
base. The platform will also give buy-
ers a wide choice to pick and choose
policies as per their needs. It will as-
sist the insured/buyers facing chal-
lenges with existing insurers/agents to
port their respective policies (health &
general) based on coverage and pric-
ing. It will offer a window to view all
your policies (be it life or general),
details and renewal dates.
The platform will push for end-to-end
digitisation of the insurance-selling
ecosystem. The selected repositories
can help maintain the insurance poli-
cies of the policyholder and his family.
Policyholders will have their E-
insurance accounts wherein they can
view their policies and file a claim.
“The information links stored in one
place will make claim settlement
easier for nominees/beneficiaries.
Moreover, the portal will help indi-
viduals apprehensive about sharing
their contact details with aggregator
portals to obtain policy premium
quotes,"
Bima Sugam will have a largely
democratised ownership pattern. Mul-
tiple insurance companies providing
general and life insurance are expected
to become significant shareholders of
the one-stop online insurance plat-
form.
Reported by - Hemant Agrawal

9
INGENIOUS
EFFECT ON US
US trade with Russia and Ukraine is mini-
mal, but the war will fuel already high
inflation and slow growth in consumer
spending. Even before Russia’s invasion
of Ukraine, commodity prices were surg-
ing globally owing to four factors: supply-
chain disruptions; adverse weather events;
new waves of the coronavirus pandemic;
and recovering global demand. The fur-
ther, war-induced rise in global commodi-
ties price comes at a time when US infla-
tion is already at a 40-year high (of 7.9%
year on year in February). We expect US
inflation to remain at current levels (nearly
8% year on year) at least until the middle
of the year. This will weigh on consumer
spending and real GDP growth. As a result, we have lowered
our forecast for US real GDP growth this year from 3.4% to
3%.
(source: eiu.com)
Russia-Ukraine conflict & it’s impact on India
& it’s economy:
Immediate Adversities:
As the conflict broke out, Sensex crashed by 2700 points due
to panic selling, nervousness amongst the investors leading
to Rs. 7.5 lakh crores being wiped off from the stock market.
The Russian stock market nose-dived by 50% which in turn
had a significant impact on all the Asian stock markets. The
conflict also triggered the gold & crude oil prices which were
almost at their highest which we shall discuss further. b. In-
dia has limited connects relating to banking & corporate sec-
tor with both the countries so impact shall be negligible on
such areas, as per the report given by SBI. Various Non-
Russian organizations operating in Russia terminated their
operations due to the conflict, and majority of them were
from or related to US, for example PayPal, Mc Donald’s,
Disney, et cetera.
Read more at:
https://taxguru.in/corporate-law/impact-russia-ukraine-
conflict-indian-economy.html
Copyright © Taxguru.in
Russia is the one of the largest crude oil producers in the
world & due to the sanctions imposed by the US on Russia,
crude oil prices are expected to rise further due to the ongo-
ing tensions. The sanctions may also lead to an increase in
the crude oil prices, and it has already crossed the $100 per
barrel mark ($108 as on 5th May, 2022), which is highest
since 14 years & its price was already up by 45% in the first
6 months of 2021(was rallying to $80 per barrel). But there
shall be a negligible impact on India as of now as India im-
ports most of it’s oil needs, but majority of it comes from
Middle East as logistics & transportation is cheaper due to
the geographical positions of countries. Russia has a large
area covered where it can supply oil through pipeline to the
Europe & neighbouring countries, through road to the coun-
tries residing in the south of Russia & via sea route to the
western countries through Alaska.
Due to this ongoing conflict, petrol & diesel prices are al-
ready on the peak. Prices of the commodities in India are
highly influenced by the petrol & diesel prices. When the
prices of the petrol & diesel are increased, the transportation
& logistics costs will also increase which will lead to an in-
Nov-Dec 2022
Sa ma c h a ar
crease in the prices of the domestic as well as international
commodities. Oil prices are also expected to rise further.
Because of this, India will have an adverse impact as India
imports around 80% of its oil needs. India imports $205 Bil-
lion worth of oils & minerals, $832 Million worth of pre-
cious stones, $609 Million worth of fertilizers from Russia,
so increase in the prices of such commodities may lead to
considerable inflation in the country. b. Russia supplies crude
oil, natural gas, and other resources to most of the Europe,
and Russia is also one of the largest wheat producers in the
world & accounts for more than 18% of the international
exports, India also imports 84% of the sunflower oil from
Russia and if all these supply chains are halted, it will have a
significant negative impact leading to inflation & such other
circumstances. 4. Favourable movements on commodities
which India exports:
Favourable movements on commodities which India exports:
a. Russia & Ukraine, both are one of the major grain produc-
ers & exporters around the globe, and due to this conflict,
exports relating to such commodities are being halted & there
is a potential vacuum in the market. For instance, Russia &
Ukraine are one of the leading wheat producers in the mar-
ket, but due to war, supply of wheat is getting disrupted, so
here vacuum is already being filled by India by increasing
wheat exports. b. Wheat from Gujarat, Rajasthan & Uttar
Pradesh is being delivered at Rs. 2,400 to Rs. 2,450 per quin-
tal as against Rs. 2,100 per quintal or so, that too in the span
of hardly 15 days. The only thing to consider Indian Govern-
ment needs to carefully manage both, India’s overall domes-
tic stock availability as well as exports. Prices of edible oil,
vegetable oil, oilseeds are also skyrocketing.
There is also a potential availability of benefit to the mustard
oil growers in Rajasthan & Uttar Pradesh, who are set to
market their crops in the coming weeks. At present the mus-
tard prices are ruling above Rs. 6,500 per quintal which is
above minimum support price of Rs. 5,050 per quintal. Cot-
ton prices are also elevated because synthetic fibre is getting
costlier. Brent crude oil is one the largest factor for uplifting
prices of the above-mentioned commodities as well as other
commodities. India must carefully observe & analyse the
current scenario, and act accordingly, so that there may be a
potential possibility of favourable outcome in many such
areas from this ongoing conflict.
Read more at: https://taxguru.in/corporate-law/impact-russia-
ukraine-conflict-indian-economy.html
Copyright © Taxguru.in
Reported by - Geeta Mohan
10
INGENIOUS Nov-Dec 2022

Sa ma c h a ar

2nd Tranche

O
raman had first announced the second
phase of the PLI scheme in manufactur-
ing solar modules in her budget speech
n 21st September 2022, The Un- on February 1 this year. “In order to sup-
ion cabinet approved the second tranche port domestic manufacturing of solar
of the Performance Linked Incentive panels for meeting the target of 280 GW
(PLI) scheme to boost manufacturing of of installed solar capacity by 2030,
solar photovoltaic (PV) modules in India. ₹19,500 crore for PLI for high-efficiency
modules with priority to fully integrated
Mr. Anurag Thakur – Union Minister units will be made in 2022-23,” she said
said that, the second tranche of the PLI while tabling the union budget.
scheme for the national programme on
‘high efficiency solar PV modules’ has “Solar PV manufacturers will be selected
been approved with an outlay of through a transparent selection process.
Rs.19,500 crore. Through this we are PLI will be disbursed for five years post
looking at achieving manufacturing ca- commissioning of solar PV manufactur-
pacity of Giga Watt (GW) scale in solar ing plants on sales of high efficiency so-
PV modules in India, thereby reducing lar PV modules from the domestic market
import dependence in the area of renewa- will be incentivized.
ble energy. It will also strengthen the
government’s Atmanirbhar Bharat initia-
The Centre in an official release, noted
tive and generate employment,” that the scheme will bring “direct invest-
ment of around Rs.94,000 crore and will
Union finance minister Nirmala Sitha- also help in the creation of manufacturing
capacity for balance of materials like
EVA, Solar glass, back sheet etc” and
lead to direct employment of about
1,95,000 persons and indirect employ-
ment of around 7,80,000.
To promote indigenous production and
curtail imports from China, the govern-
ment last year on March 9 had announced
basic custom duty on solar cells and mod-
ules. “After that announcement, the mod-
ule manufacturing capacity in India has
doubled from about 10GW to 20GW.
Cell manufacturing capacity in India has
also gone up from 3GW to nearly
4.5GW,” the MNRE secretary said.
Reported by—Bharthi Srinivasan

First you create an image of your future in your mind,

your mind commands your actions

to create that same future in your life

GRAND IMAGE, GRAND LIFE
-rg

11
INGENIOUS Nov-Dec 2022

Sa ma c h a ar

INDIA’S DEFENCE EXPORTS

JUMPS 334% IN LAST 5 YEARS

Th e Indian defence ecosystem is

spreading its arms overseas as military
exports have jumped by 334% in the last
five years, which involves supplies of
arsenals to more than 75 countries around
the globe. India has taken several policy
initiatives in the past few years to amplify
its indigenous design, development, and
manufacture of defence equipment, to
make world-class military apparatus
“The Indian Defence sector, the second
self-reliance in defence manufacturing & The third list includes 101 military equip-
largest armed force, is at the cusp of rev-
technology. ment which will come into effect from
olution. Defence exports grew by 334 per
December 2022.
cent in the last five years; India now ex- The slew of initiatives include priority to
porting to over 75 countries due to col- the procurement of capital items from Strategic defence products including
laborative efforts,” domestic sources under Defence Acquisi- Light Tanks, Helicopters, and Unmanned
tion Procedure (DAP)-2020, the an- Aerial Vehicles are the part of indigenous
India exported around Rs 1,387 crore
nouncement of 18 major defence plat- list for which there would be an embargo
worth of defence-related exports during
forms for industry-led design and devel- on the import beyond the timelines indi-
the first quarter of the financial year 2022
cated against them.
Two defence industrial corridors have
been established — one each in Uttar-
Pradesh and Tamil Nadu to bolster indig-
enous manufacturing.
The Defence Ministry has set a target of
Rs 1.75 lakh crore of defence production
by 2025, which will include export of Rs
35,000 crore.
Defence Minister Rajnath Singh said the
major role in achieving this goal with a
contribution of 70-80 percent would be
done by India’s Defence Public Sector
Undertakings (PSUs),
opment, liberalization of foreign direct. Listing out various initiatives taken by
-23. Further, the country’s defence and Defence Ministry to achieve self-reliance,
technology related exports touched the Investment (FDI) policy allowing 74 per Rajnath Singh mentioned that simplifica-
highest-ever figure of Rs 12,815 crore in cent investment under the automatic tion of acquisition process under Defence
the financial year 2021-22, a 54.1 % rise route, among several others. Acquisition Procedure 2020; flexibility in
over the previous year. To minimize import by Defence Public Offset guidelines; increase in FDI limit to
Sector Undertakings (DPSUs), the De- 74% under Automatic Route and up to
In 2020-21 India’s defence exports was
partment of Defence Production (DDP) 100% under government route; simplifi-
worth Rs 8,434 crore, in 2019-20 Rs
has notified three Positive Indigenisation cation of process of obtaining license;
9,115 crore and Rs 2,059 crore in 2015-
Lists (PIL) of sub-systems/assemblies/ launch of Innovations for Defence Excel-
16.
sub-assemblies/ components. lence (iDEX) initiative and enhanced use
India’s defence exports are mainly to
countries like the US, the Philippines and The first list contains 2,851 items out of of Artificial Intelligence in the defence
other countries in South-East Asia, the which 2,500 items have already been sector have bolstered the goal to achieve
Middle East and Africa. indigenized. self-reliance.

In the past few years, the Government of The second list consists of 107 strategic
India has taken various policy initiatives important Line Replacement Units/major Reported by - Jawahar Lal Sukhwal
to encourage indigenous manufacturing sub-assemblies.
of defence equipment, thereby promoting
12
INGENIOUS
Role & Importance
of a Professional
Insurance Advisor
L
ife insurance is a very important contract. When
there is a sufficient cover provided for the family in
case of unfortunate death of a family member a life
insurance policy becomes a life saver for the remain-
ing family members for their remaining life time. When a
sum of money or series of income or combination of both is
received from a properly & professionally guided insurance
policy it takes care of a family’s all the future working capital
need & once a while nonnegotiable major expenses plus
debt if any. Role & knowledge of a professional insurance
advisor is not only important in analyzing client needs and
suggesting a proper insurance policy or a combination of
policies in a complex world of life insurance products but
also in filling up the proposal form. The questions are so
technical, they also require a help of an experienced profes-
sional advisor. If the answers of proposal form are not
properly given it may result in rejection of a death claim up
on which your family’s entire future depends.
I will explain the role & importance of a professional advisor
in 2 stages.
1. Need analysis for the recommendation of right prod-
uct and in a proper quantified manner.
2. Technical things involved in processing of insurance
proposal form
Let’s understand PART 1 Need analysis for the recommenda-
tion of right product and in a proper quantified manner. Part
2 we will discuss in next issue.
Importance of professional advisor in Need analysis &
product recommendation.
There are main 2 types of financial planning needs.
1. Predictable future events
Predictable events are those that require a sum of money
for a specific purpose at a specific time in the future.
Advisor also need to consider what would happen if the pre-
dicted event does not take place, or if something happens
that stops the client from achieving his/her financial goal.
For example, unemployment or early retirement may mean
that clients can no longer afford to save for the event; their
children may not complete their education or may not marry
meaning the money is no longer required, or inflation may
mean that more money is required than was originally
planned.
An advisor therefore needs to build flexibility into financial
plans so that they can be changed, if necessary. Examples of
Part—1
flexibility built into some financial products include the abil-
ity to:
 immediately access money in the case of an emer-
gency;
 change the beneficiaries or cover of existing plans in
the event of marriage, birth or divorce;
 increase, decrease or suspend contributions to plans
without penalties if a client’s income changes;
 switch investment funds to meet changing economic
conditions or a client’s feelings towards risk.
2. Unpredictable future events
An unpredictable event is one that may happen at any time
in the future – or may not happen at all. Examples include:
 long-term incapacity because of sickness, accident or
disability;
 the onset of a critical illness;
 the death of a parent before children are financially
independent; and
 unemployment.
There is no way of knowing who will be affected by these
events, nor at what age. However, when these events do
happen, the financial consequences can be devastating.
Therefore, all individuals need to adequately protect them-
selves and their dependents against these events.
Identifying a client’s real financial needs: There are four
main steps to take when identifying a client's financial
needs:
 distinguishing between perceived and real needs;
 distinguishing between current and future needs;
 quantifying needs; and
 prioritizing needs.
13
INGENIOUS
Role & Importance of a Professional Insurance Advisor
The figure here gives the hierarchy of financial planning
needs. It gives the order in which needs must be met.
It says we must provide 1st for unpredictable future events
as it may or may not happen at all but if they happen, we do
not know when they will happen.
Once the unpredictable events are taken care of only then
and then we should provide for predictable future events.
There are typically 7 life cycle stages and in each stage pro-
tection & savings requirement do vary. The figure below
provides the list of those 7 life cycle stages. A professional
insurance advisor correctly identifies client’s protection
need and recommends product necessary.
Let’s understand the protection and investment needs of a
young unmarried person & priority of needs.
Protection need: Loss of income due to disability, critical
illness or any other illness.
Loss of income due to death only if there is dependent on
him otherwise not needed. However, care should be taken
to ensure that there are no probable dependents in near
future. Like if parents are retiring next year and would be
dependent on him. In this case a life insurance policy can be
suggested to take age & health advantage.
Emergency Fund: Unexpected expenses, unemployment.
Supplemented with short-term savings needs like Holidays,
Wedding, Deposit for buying a car etc. Without adequate
provision of an emergency fund the client may cut his long-
term protection plans and long-term investment plans. In
such cases he may lose money as well. This is why provision
of emergency fund is very much important.
Long term investment needs: Once the protection and
emergency fund needs are satisfied then long-term invest-
ment needs should be provided for starting with funding for
pension followed by funding for personal aspirations. It is
ideal to start even from the first income for retirement, so
that the client can provide for adequate amount of pension
Nov-Dec 2022
with lower annual cost.
This is just atypical example. The role of a professional advi-
sor does not end here. It requires reviews on continuous
basis. There are certain events which increase the severity of
earning members death to very high upon dependent family
members. Like getting married, birth of a child, increase in
income, increase in aspirations, new debt taken, loss of an
asset etc. Whenever the severity of loss of income goes very
high a proper quantified life insurance policy ensures that
the economic severity is very low to the surviving family
members. Buying life insurance reduces severity of econom-
ic loss but does not reduce probability of the event happen-
ing. There are many factors which increase the probability of
death like health, age, locality, disease etc. And make the
person uninsurable. Care must be taken to take a life insur-
ance policy before the person becomes uninsurable. Be-
cause here the person would be desperate to get insured
but life insurance company would be unable to provide risk
cover.
Professional principles life insurance advisor needs to fol-
low:
1. Ethical conduct
2. Professional conduct
3. Professional competence
The ability to advise on financial services products requires
considerable background knowledge of insurance, invest-
ment, tax, economics and law. The adviser also needs an
extensive knowledge of financial products, as rarely are two
products that meet the same general need identical in every
way.
4. Continuing professional development (CPD)
Professional advisers live in an ever-changing world. Chang-
es in interest rates, inflation, currency movements, stock
market prices and political affairs all affect the advice to be
given on investments and other financial services products.
Such changes and the forces of competition among product
providers mean that new products are constantly intro-
duced and old products withdrawn. These changes happen
14
INGENIOUS Nov-Dec 2022

Role & Importance of a Professional Insurance Advisor

with such rapidity that a financial adviser's knowledge is The above figure shows share of Unfair Business Practices
likely to become out-of-date almost as soon as each profes- complains received as a percentage to the total complaints.
sional examination is passed. This is one reason why all fi- LIC where almost 94% business in underwritten through
nancial advisers need to commit themselves to continuing agents show 3.57% complaints related to UFBP. In private
professional development throughout their careers. sector where almost 54% business in underwritten through
5. Professional principles banks show 74.14% of total complaints related to UFBP.
Source last published IRDA annual report.
We the FCFP Alumni believe
 Building our competence is our primary duty towards
our customers.
 Building our competence is our primary duty towards
our society.
 Building our competence is the preeminent way of
expressing our gratitude to our customers for their
kind act of choosing us to serve them.
By this time, you must have understood the role & im-
portance of a professional financial advisor. Now let’s look
at the dome of the data from IRDAI’s (Insurance Regulatory
and development authority) last annual report.
The figure here shows Channel wise new business under- Channel-wise Mis-Selling Complaints. Source last published
IRDA annual report.

written by life insurers. From the figure it is clear that in LIC

93.87% of total business is underwritten by individual agents
and only 23% business is underwritten by individual agents
in private sector. In LIC only 3% business is underwritten by
banks and in private insurers 54.55% business in under-
written by banks. Source last published IRDA annual report.

15
INGENIOUS Nov-Dec 2022

Role & Importance of a Professional Insurance Advisor

The figure shows penetration of insurance in India. It is

measured in 2 ways. As a percentage of premium to GDP &
as a ratio of insurance premium to population (Insurance
Density). If you look at the figures in both the terms insur-
ance penetration is very low in India. Source last pub-
lished IRDA annual report.
As per above figure in India protection gap stood 83%.
Means people were insured only to the tune of 17% of re-
quired cover. Source Swiss Re, Sigma No. 04/2022.
Looking at all the above factors, low penetration of insur-
ance in India, Largest protection gap in life insurance, India
needs physical presence of well trained, experienced and
professional advisors. Physical presence of a professional
advisor has a very big role to pay for the families to ensure
every family is financially secured in the absence of earning
member. For the country by making penetration as percent-
age of GDP in double digit and contribute in India becoming
largest economy in the world.

Ankur Shah

O f f i c e B ea rer s
Mr. R. Gopinath Chairperson
Mr. Ankur Shah Convener
Ms. Savita Pillai Secretary
Ms. Bharthi Srinivasan Member
Mr. Atul Jain Member
Mr. Ajay Kumar Tyagi Member
Mr. Inderpal Singh Bindra Member

16
RBI – Press Release

17
RBI – Press Release

18
RBI – Press Release

19
RBI – Press Release

20