Differently-abled in India: Financial products inadequate despite new SEBI rules

Time of India

2 days ago

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In a circular dated 31 July, the Securities and Exchange Board of India (Sebi) mandated all regulated entities under its ambit—stockbrokers, asset managers, mutual funds depositories , bourses, among others—to ensure that their digital platforms are accessible to the differently-abled, in accordance with the Rights of Persons with Disabilities Act, 2016.Over the years, reforms by the market watchdog and the government have reshaped India's economy and boosted financial freedom. The latest Sebi circular is a welcome step for persons with disabilities (PwDs). However, this remains a section of society where financial regulators have yet to make a truly meaningful impact.That is perhaps why Abhishek Anicca, 38, has a thin portfolio—unsurprising given his multiple roles as a disability rights activist, poet, author, and columnist. Living with a locomotive disability from a congenital disease as well as chronic UTI, he navigates the world with a crutch. He moved from Delhi to Patna in 2021 and lives alone, with support from his parents who live in Darbhanga. A handful of fixed deposits and around Rs.2 lakh in mutual funds is all that the fiscally conservative Anicca has invested. Why hasn't he put more effort into diversifying his savings?'Living in a city is very expensive. Most PwDs can't live on their own and need to pay for caretakers. Public transport is a challenge, so you can't help but spend on private vehicles. And whatever groceries I need, I must have them delivered from ecommerce websites,' he explains. Anicca says a single unfortunate incident could deplete his savings, leaving him dependent on fundraising.Tavanpal Singh, meanwhile, is a more disciplined investor. A cerebral palsy survivor with 80% disability, he uses crutches like Anicca. Singh works as a journalist with a news portal based in Bengaluru. The 31-year-old spends a major chunk of his monthly income on physical therapy, in addition to other expenses: the rent for his apartment, where he mostly lives alone, daily cab fare to and from his office, and everyday provisions.Even before relocating to Bengaluru in 2023, Singh had hired a financial planner in 2021 and begun investing through multiple SIPs. Later, he roped in a chartered accountant friend to help build a proper corpus.'Not just a corpus, you need different streams of income,' he says. He prefers to keep his investment details private, sharing them only with his parents and chartered accountant.:'PwDs must have 100% autonomy over their money if they are of sound mind. Parents, kin and friends should assist only in the way the person wants.'RUSHABH DESAI FOUNDER, RUPEE WITH RUSHABH INVESTMENT SERVICESThis sense of privacy is shared by Rushabh Desai, Founder of Rupee With Rushabh Investment Services, a Mumbai-based investment and mutual fund distribution firm. Desai, who has been a wheelchair user since the age of 17, minces no words in saying that PwDs must have 100% autonomy over their money if they are of sound mind. 'Parents, kin and friends should assist only in the way that the person wants,' declares the 36-year-old.An advocate of mutual funds, he suggests that PwDs—many of whom have sought his services—start small to get a hang of them. 'Fixed deposits won't help beat inflation, the impact of which is more pronounced on PwDs. We need to make them understand how compounding works. Hence, equity funds are the only asset class that will beat inflation. Even an index fund with the top 50 or 100 companies, or a product from State Bank of India—a government-backed institution—will suffice. The key is diversification.'But what about insurance, a cornerstone of India's financial system? Health insurance is strongly promoted by both the government and industry. As of 31 March 2024, the assets under management (AUM) for general, health, specialised, and reinsurance companies exceeded Rs.6 trillion, according to the 2023-24 annual report of the Insurance Regulatory and Development Authority of India (IRDAI), released in December 2024.For PwDs, while the government's Ayushman Bharat- Pradhan Mantri Jan Arogya Yojana provides health cover of up to Rs.5 lakh, offerings by private players are severely lacking. Insurers are unable to tailor products catering to the needs of PwDs, and the service quality is subpar. Anicca decided not to take a health cover. 'A few companies approached me, but none were clear about what they could offer.' Singh does have a policy, but he has little faith in a system that charges PwDs exorbitant premiums and does not offer customised products, despite an IRDAI order issued over two years ago.Compared to the insurance market number stated above, the AUM of the nation's mutual fund industry stands at a staggering Rs.74.4 trillion as of June, as per data from the Association of Mutual Funds in India (AMFI).Yet, Desai admits that neither the industry nor regulators have done enough to sell PwDs this instrument. 'When the industry penetration is hardly above 10% of India's population, little can be said about the penetration among the differently-abled.'He recommends offering tax exemptions to PwDs at the product level itself, instead of during the return-filing process, to make mutual funds attractive to potential consumers and to distributors.Parents of PwDs often worry about future financial security, especially amid rising costs and the need for a reliable system to protect their child. 'Even if monetary provisions are in place, what if the caregiver turns hostile?' says Rajat Dutta, Founder of Inheritance Needs Services. 'That's why we insist on detailed interactions with parents and siblings while drafting testamentary documents.' Dutta recalls a paralysed client who had to visit the bank to give a toe impression to operate his account. 'It's not just about inheritance or money,' he adds. 'A supportive social environment is essential for a dignified life for PwDs.'