Budget Expectations 2024: In view of the upcoming elections, Budget 2024 will be an interim one with limited policy announcements. However, there are some expectations that still represent the general aspirations of the Indian insurance industry.
Many of these expectations relate to the government’s “Insurance for All” approach, which aims to achieve universal insurance coverage by 2047.
The insurance industry is critical to India’s economic growth and financial stability, so the government can focus on measures to promote its growth and penetration.
With the Interim Budget 2024 due on February 1, some of the key expectations from the insurance sector are:
digital health record
Rupinderjit Singh, VP, Retail Health, ACKO, highlighted that in 2023, regulatory measures like Bima Sugam, National Health Claims Exchange (NHCX) and Insurance Amendment Bill led to massive growth in the health industry.
“The growing demand for seamless digital experiences, personalized offerings and increased accessibility will drive even more exciting developments in the industry in 2024. With the harmonious synergy between the National Health Association, IRDAI and NHCX, the sector is set to flourish and promises to enhance these changes while offering unparalleled growth to customers,” said Singh.
In the upcoming Budget, Singh anticipates the government will take steps towards India’s digital health mission by promoting ABHA ID, which will enable digital health records and create a seamless health insurance claims experience.
GST exemption
Ankit Aggarwal, Co-Founder and CEO, InsuranceDekho, said, “We are hopeful that the Finance Minister will exempt insurance policies from GST, which will lead to reduction in insurance premiums. “This step will increase insurance affordability and help fulfill Prime Minister Modi’s dream of insurance for all Indians by 2047.”
Tax exemption under 80C
Aggarwal says the industry is also hoping that the government will increase the tax exemption limit under 80C, which will boost savings, boost insurance coverage and boost economic growth.
“Various studies have shown that increased insurance penetration multiplies the economy by reducing overall financial distress and providing long-term growth capital for critical nation-building industries,” Agarwal said.
Remove tax from annuity return
Tejas Jain, founder of Bima Kavach, also calls for a lower GST rate on insurance premiums.
Jain says insurance industry experts are pushing for significant adjustments in taxation, regulation and technology in the Budget. He supports reducing the deduction limit to provide tax benefits on life insurance products, especially term plans. To improve affordability, another is to remove taxes from annuity returns to increase their appeal.
Jain also highlights comprehensive licensing, relaxation in minimum capital requirements and promotion of micro insurance for low-income populations among the regulatory expectations.
insurtech business
Jain says support for insurtech businesses in the technology sector and emphasis on cyber security are sought to encourage innovation and protect against cyber threats, thereby ultimately encouraging ubiquitous, innovative and affordable insurance.
minimum capital requirements
Jain says minimum capital requirements for new insurers should be relaxed to promote competition and simplify operations.
The need for a more efficient industry is evident in the consideration of the composites license.
Jain also says that to ensure data security and promote technological breakthroughs, a legal framework supporting insurtech businesses and cyber security measures is essential.
Overall, the insurance industry expects the upcoming Budget to provide greater regulatory flexibility, easing some of the stringent rules that have hindered market expansion and innovation.
Keep in mind that these are just some key expectations, and the actual budget may vary. We will have to wait and see what the Finance Minister announces on the budget day.
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