The same low level of penetration is seen for both life and non-life insurance products. The select indicators of financial inclusion (Table) also prove that India has a long way to go in achieving the desired levels of financial inclusion. As the Indian financial system is pre-dominantly led by banks, the financial inclusion policy orientation has naturally been biased towards the bank-led model.
There is evidence that broadly these kind of expenditure rules, when complemented with other fiscal rules, have been successfully applied in many countries.2 Regarding the design of the rules in general, it is important that they are based as much as possible on observables, and not on un-observables such as output gap and potential output.