Expectation in Budget 2024: Anticipated Reforms and Incentives for India's Insurance & Healthcare Sectors
This topic delves into the anticipated reforms and incentives in the Budget 2024 for India's insurance and healthcare sectors. Key expectations include a reduction in GST rates on health insurance, increased tax deductions for medical insurance premiums, making input GST credit permanent for employer-paid health insurance, and the introduction of a universal health scheme. Additionally, there are calls for increased healthcare spending, tax incentives for R&D, and parametric insurance solutions to address natural disasters and pandemics. These measures aim to make healthcare and insurance more accessible and affordable, supporting the growth of these critical sectors and benefiting the Indian economy.
In the upcoming Budget 2024 in India, several key expectations for the insurance and healthcare sectors have been outlined:
Insurance Sector:
GST Reduction: There is a strong demand to reduce the Goods and Services Tax (GST) on health insurance premiums from 18% to 12% to make insurance more affordable. This reduction is expected to encourage more people to buy health insurance and widen its penetration, especially in Tier 2 and Tier 3 cities (India Today) (Outlook Business & Money).
Deduction Limits: The industry is advocating for an increase in the deduction limits under Section 80D of the Income Tax Act. The current deduction limits are ₹25,000 for individuals and ₹50,000 for senior citizens, which they hope to increase to ₹50,000 and ₹75,000 respectively, to better reflect rising healthcare costs (mint).
Employer Contributions: The temporary allowance for employers to get input GST credit on health insurance premiums paid during the pandemic is being pushed to become a permanent feature. This would encourage more employers, including MSMEs, to offer health insurance to their employees (Outlook Business & Money).
Universal Health Scheme: There are calls for the introduction of a universal health scheme to provide broader healthcare coverage and reduce the financial burden on low-income families. Making health insurance mandatory for employers is also being considered to ensure wider coverage (Outlook Business & Money).
Healthcare Sector:
Increased Spending: There is an expectation for a significant rise in healthcare spending, particularly aimed at enhancing healthcare infrastructure in rural areas and primary care facilities. This includes building new hospitals and upgrading existing ones (Outlook Business & Money).
Tax Incentives for R&D: The healthcare industry is looking for more incentives for research and development, which can drive innovation in medical technologies and treatments (India Today).
Parametric Insurance and Pandemic Pools: The budget might address the need for parametric insurance solutions to quickly respond to natural disasters and pandemics, which have significantly impacted the economy in recent years (Outlook Business & Money).
These measures are part of broader efforts to make healthcare and insurance more accessible and affordable for the Indian population, while also supporting the growth of these critical sectors.