In the run-up to the upcoming budget announcement, which is scheduled to be presented in the Lok Sabha by the Union Finance Minister, Nirmala Sitharaman on July 23, 2024, the investors are keenly awaiting potential changes and have high expectations across various sectors.
The annual financial statement or the budget which is a event in the financial calendar of any country, serves as a financial blueprint for the country's economic strategy and policy directions. It includes estimates of revenue (from taxes, fees, and other sources) and expenditures (on public services, infrastructure, defense, and other government functions).
Rakesh Kumar, the founder of Square Insurance, recently has shared several expectations that aim to enhance insurance coverage and affordability for Indian citizens.
"Increasing the tax exemption limit on health insurance premiums to ₹75,000 would make healthcare more accessible," said Rakesh Kumar.
Healthcare Expansion
Further broadening healthcare access, Kumar outlines for the expansion of the Ayushman Bharat scheme to include the middle class. "Expanding the Ayushman Bharat scheme to include the middle class would significantly increase healthcare coverage," he added.
He noted, "Introducing subsidies or tax credits for comprehensive electric vehicle (EV) insurance will promote EV adoption." By reducing the cost of insurance for EVs, this initiative could drive more consumers towards environmentally friendly transportation options.
Union Finance Minister and senior BJP leader Nirmala Sitharaman | Representative Image
Regulatory Reforms
"Offering tax deductions for home insurance premiums under Section 80C will encourage homeowners to protect their assets," he noted.
"Healthcare regulatory reforms, including creating an autonomous regulatory body, establishing a health claims exchange, and streamlining cashless authorizations, are needed to improve oversight and service quality," Kumar added.
"Tax incentives for cyber insurance, particularly for SMEs, are essential," he pointed out noting the importance of cyber insurance, particularly for small and medium-sized enterprises (SMEs).
Changes in tax rates, public spending, and fiscal policies can affect everything from business profitability to household budgets.
Microfinance Sector
"Extending deductions to other personal insurances will promote comprehensive coverage. Introducing parametric covers and mandatory coverage for shops and establishments will enhance resilience for vulnerable groups," Kumar added.
Life Insurance Affordability
He proposes, "Comprehensive tax reforms for life insurance, such as allowing complete deductions for premiums, lowering GST on term life insurance, and implementing zero-rating for specific policies, will make life insurance more affordable."
As the budget announcement approaches, these recommendations provide a glimpse into potential policy shifts that could shape the future of insurance and financial planning in India.
