Union Budget 2022: Finance minister Nirmala Sitharaman will present the Union Budget 2022 at the Parliament on February 1, which is a week away. Amid the Covid-19 pandemic, expectations are there that this years budget will focus on the healthcare sector too, much like last year. On that note, it should also be kept in mind that the pandemic, which has had three different waves till now in India, has accelerated the need to invest in insurance cover. Health insurance has become all the more important due to rising hospitalisation rates, while life insurance cover has come in handy as an increased number of deaths took place over the last two years.
While the insurance providers have seen themselves playing a key role over the time, the rate of insurance penetration is still low in India. According to experts, in order to turn the tables, few changes in the Budget 2022 are required in the health insurance sector as Covid-19 seems to stay here for long.
“In the wake of Covid19 pandemic, insurance has emerged as the most essential tool to secure the family from financial uncertainty. The industry has long pending expectations from the policy makers for incentivizing people to get life insurance by giving a separate deduction limit of minimum INR 1 lakh for insurance premium payment under Section 80C,” said Tarun Rustagi, chief financial officer of Canara HSBC OBC Life Insurance.
Commenting on the need to reduce GST on health insurance products during the Union Budget 2022, Rustagi said, “Further even though GST is not covered under budget, however policy makers’ should also look towards exempting or lowering GST rates on life insurance products and these should ideally be classified under essential product category.”
Speaking on similar lines, Niva Bupa CEO and MD Krishnan Ramachandran said that the 18 per cent GST on health insurance products increases the premium amount.
“The 18 per cent GST which is currently levied on health insurance products increases the premium amount which acts as a hindrance for many prospective policy buyers. Reduction of the GST amount for health insurance plans will make the products affordable for the masses and lead to higher penetration across consumer segments,” said Ramachandran.
“The Government could consider doubling up of medical insurance limit under Section 80D to Rs 50,000 in light of higher medical expenses post Covid. One of the major challenges for low penetration of health insurance is the affordability factor,” he added.
Rakesh Jain, CEO of Reliance General Insurance Co. Ltd said that bringing healthcare facilities under the ambit of infrastructure will provide an increase in funding from large institutions.
“For the Union Budget 2022, the Government should consider bringing healthcare facilities, such as diagnostic centers, specialty hospitals, wellness facilities, under the “Infrastructure” category. This will bring in funding from large institutions, including insurance companies that seek and have regulatory obligation of investments in “Infrastructure assets”. The insurance and healthcare sector need to evolve together to boost access to quality and affordable healthcare to the masses,” said Jain on Budget 2022.
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