Finance minister Nirmala Sitharaman is set to table her eighth consecutive budget in the parliament on February 1. As consumption slowdown has been a big pain point for India Inc., all eyes are on Sitharaman’s upcoming budget, with different sectors expecting major relief.
The health insurance sector too is pinning their hope on the upcoming budget to bring policy reforms to make health insurance more affordable and accessible in the country amid increasing healthcare costs.
It has been a long-standing demand of the health insurance industry to remove the 18 per cent Goods and Services Tax (GST) levied on health and life insurance so that coverage can be increased.
Rising Healthcare Cost
Citing the government’s vision for ‘Insurance for all by 2047’ ManipalCigna Health Insurance’s CFO, Srikanth Kandikonda suggested the government to increase spending on public healthcare as it would substantially bring down the financial burden of families investing in their healthcare.
“Healthcare costs are rising significantly and expected to double in six years...given the rising costs and the need for higher sum insured cover, the government should reduce tax burden by increasing the limits under Section 80D of income tax for premium paid for health insurance to Rs 50,000 for all and Rs 1 lakh for senior citizens,” said Kandikonda.
Moreover, as the middle class is hoping to get tax relief in the upcoming budget. Bajaj Allianz’s MD and CEO, Tarun Chugh highlighted how income tax cuts can leave people with more disposable income and result in more people opting for medical insurance.
“Anticipated income tax cuts in the upcoming budget could boost disposable income, driving higher life insurance penetration...We urge the government to introduce separate tax deduction,” said Chugh. “We urge the government to introduce separate tax deduction for term insurance and extending the tax deduction on life insurance premium under the new tax regime as well,” he added.
Additionally, a holistic ecosystem is required to expand health insurance coverage, especially in the underserved regions. SBI General Insurance’s MD and CEO, Naveen Chandra Jha, emphasised how health insurance has come up as a crucial safety net for Indian families, protecting them from sudden and unexpected medical expenses.
“Additionally, the budget is likely to focus on expanding access in underserved regions through government-private partnerships, targeted subsidies, and advancements in digital infrastructure. By fostering a conducive ecosystem, Budget 2025 can empower insurers to contribute to a healthier, more secure India,” said Jha.
