Insurance Role in Growth of Country Essay

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Contribution of Insurance to the growth and development of India Economy For economic development investment are necessary, investment are made out of saving. Insurance company are the major for mobilizing saving specially from middle and lower income groups. These saving are utilized for economic growth. Insurance serves a number of valuable economic functions that are largely distinct from other types of financial intermediaries. According to the official estimates, Indian economy is expected to grow at 7.6 percent in the fiscal year 2012-13. However, leading organization expect Indian economy to grow slower than official projection. The economy of India is tenth-largest in the world and third largest by purchasing power parity. The country is one of the G-20 major economies and a member of BRICS. On per capita basis India rank 120 as per IMF. Fortunately, in the past few years, several interesting line of research have begun to map the specific contributions of insurance to the economic growth process as well as to the well being of the poor. The evidence suggest that insurance contributes materially to economic growth by improving the investment climate and promoting a more efficient mix of activities than would be undertaken in the absence of risk management instruments. This contribution can be magnified by the complementary development of banking and other financial systems. Empirical studies suggest that non-life insurance contribute to growth in countries at many different level of development. Life insurance make a substantial contribution to growth in wealthier countries, since life insurance is typically a smaller part of the total insurance market in low income countries. Of course, even if the data did not support a stronger causal role for insurance as an engine of overall aggregate growth of the Indian Economy. GDP (Gross

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