Life Insurance Corporation of India Chairman S B Mathur on Monday said the insurance industry would grow by over 20 per cent this fiscal, almost double the 10.5 per cent growth registered in 2003-04.

"We are aiming at a minimum of 20 per cent this year, but are keeping our fingers crossed for the Budget next month," Mathur told reporters in Bangalore.

He said the industry saw a drop in single premium income last year due to exemption of tax under Section 10D, and LIC which has a 88 per cent share in the insurance market, showed a dip of Rs 1,900 crore (Rs 19 billion) in single premium income.

Mathur said he favoured increase in the limit from the existing Rs 10,000 under Section 80 CCC for pensionable schemes and cited that in the 1980s the limit was about Rs
45,000.

He said interest rates may rise by .25 basis points to .50 basis points due to demand in capital, but did not set a time frame for the rise.

Mathur, who was in Bangalore to launch LICHFL Care Homes Ltd, said the housing subsidiary had sanctioned Rs 10 crore (Rs 100 million) for a pilot project here to set up about 100 cottages for older people on the city outskirts, which is to be completed in 15 months.

He said similar projects were envisaged in Cochin and Hyderabad, besides other major cities.

Mathur said LIC Housing finance was aiming at dispersing Rs 6,200 crore (Rs 62 billon) this fiscal, as against Rs 4,100 crore (Rs 41 billion) last fiscal.