MICRO INSURANCE - MECHANISM AND OPPORTUNITIES FOR THE SUSTAINABLE DEVELOPMENT OF INDIAN ECONOMY

The growth of Micro Insurance has been increasing in the past decade. In recent years, this concept has gained remarkable progress in our country. The developing country like India Micro Insurance is an economic instrument in supporting the sustainable development of the poor and reducing the inequality. Micro insurance is protection for the low-income population. In India 70% of the population resides in the rural areas but they do not have small insurance coverage. Therefore, micro insurance is an enormous opportunity to get social protection to low income people especially those in the informal economy who tend to be underserved by mainstream commercial and social insurance schemes. A study of United Nation Development Programme (2006) stated that India is potential prospectus for micro Insurance and as per the directions of IRDA 20 per cent of business should be done by the micro insurance companies in rural areas for fulfilling their social and rural obligation. In this regard many of insurance companies expand their business operations towards micro insurance. The main objective of this paper is to study the Micro Insurance market in India, to analyse the initiatives taken and progress made for sustainable development of micro insurance in India.