Union Finance Minister Arun Jaitley will be presenting the much awaited annual budget on February 1. Explaining the need to ensure a social security for all the citizens, Rajiv Kumar, Managing Director (MD) and Chief Executive Officer (CEO), Universal Sompo General Insurance Company Limited shares his expectations from the Budget 2018.
Considering the low insurance penetration and inadequate coverage for the population we expect below-mentioned assistance/ exceptions from Central Government which will be able to help build a stronger social security net for Indians in future.
GST rates to be reduced: Since the launch of GST (Good and Services Tax), the prices of general insurance products have gone up by 3 percentage points to 18 per cent. Insurance penetration and awareness in India is very low and with increased tax now it has become more costlier. Besides, insurance is a unique business where free look period is provided and such products needs to be facilitated. Hence with growing economy, considering insurance products as necessary rather than luxury would be more requisite in the upcoming budget. We expect GST rate to be reduced for insurance products and will be considered in upcoming budget.
Separate exemption limits for health insurance beyond 80 D: With increasing health treatment cost, Health insurance has now turned up as necessity and is required for every citizen of India. Besides, several health products like critical illness, specific insurance policies for senior citizens, wellness policies etc. are available and aggregate coverage my turnout larger than exemption provided under section 80 D. Hence in order to promote health insurance and to support needy and senior citizen, we expect exemption on health insurance to be provided as separate segment other than 80D.
Exemption on home insurance: There had been an increasing number of calamities and devastation happened in past which revealed that very low percentage of home were insured. Government has introduced Pradhan Mantri Aawas Yojana, with an expectation to provide home to each citizen in India. Hence we also expect government to provide exemption on home insurance in this budget to encourage people to by home insurance which will be beneficial for them at the time of distress or natural calamity.
The article has been written by Rajiv Kumar, MD & CEO, Universal Sompo General Insurance Company Limited.