A special economic zone (SEZ) for financial services has been proposed for by the GMR group in Hyderabad. The Commerce Ministry says the board of approval (BoA) will take it up in the first week of June and examine the proposal in detail as it was the first of its kind.. The SEZ is said to attract firms offering insurance, mutual funds, micro finance as well as non-banking financial services.
India’s growth and energy to emerge as a major economic power not just in the Asia Pacific region, suggest the need for aggressive ventures in financial services offerings. The Percy Mistry Committee, in its 2007 report based on conservative assumptions, estimated that purchases by Indian households & firms of international financial services would be nearly $50 billion by 2015 and exceed $120 billion by 2025. Central Statistical Organisation states that data, financial services, banking, insurance and real estate grew 7.8 per cent in the third quarter of 2009-10. The government had taken a number of steps to revive the economy, including slashing interest rates, lowering factory levies and more than doubling the limit on foreign investment in corporate bonds resulting in an over 7 per cent economic growth in 2009-10 along with a rapid expansion of financial services. Registered foreign institutional investors were 1,710 and the cumulative investments in equity from November 1992 to March 2010 were $76.74 billion. Investments in debt during the same period stood at $11.85 billion. Assets under management of the mutual fund industry on an average increased to $174.06 billion in February from $111.55 billion in a year, according to the Association of Mutual Funds in India.
India is an emerging insurance economy and the segment is growing at an annual rate of 32-34%.
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