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KOLKATA, March 7

THE Association of Financial Planners (AFP) sees growth in the demand for certified financial planners in India as an indirect fallout of the Budget.

In his maiden Budget, the Finance Minister, Mr Jaswant Singh, has proffered a new pension system, based on defined contribution. It will be portable, allowing transfer of benefits in case of change of employment, to be directed towards individual accounts with pension funds.

The latest provision will help the case for organised financial planning, said Mr Ranjeet Mudholkar, CEO of AFP. ``There will be a beneficial impact in terms of a widening of our market although that is not expected to happen immediately''.

Planning for retirement, it is pointed out, is a critical part of overall financial planning and the budgetary announcement will only enable India to move one more step towards exhaustive pension reforms.

Its positive stance notwithstanding, certain sections of the market would like the association to address a few important issues at the very beginning. The availability of professionals — in the right numbers — to cater to what is evidently a large market is one such point.

``After mutual funds and insurance, pensions reforms will probably be the single-biggest challenge for the Government'', a source said, adding that the authorities will have to ensure that consumers are served efficiently and honestly.

In this context, AFP has observed that tax advantages, including those that are enunciated in the Budget, and access to private pension managers should render the schemes viable. In the long term, it will refashion the way individuals save for their retirement.

The association has further underlined several other aspects of the Budget that are expected to influence individual investors.

Personal income-tax, for instance, will increase for those who earn over Rs 8.5 lakh (due to doubling of surcharge), it will reduce for others because of increase in standard deduction, waiver of five per cent surcharge, increase in Section 80L limits and removal of dividend tax.

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