The Prime Minister has been encouraging financial inclusion and financial security to citizens of the country. This has found its place in the budget speech of the finance minister. Increasing deduction of health insurance premium from Rs 15,000 to Rs 25,000 and Rs 30,000 ( for senior citizens )
This move by the finance minister is to encourage citizens to take health insurance. This ensure benefits for all – the citizens are covered for health care costs through the insurance and gives a boost to the penetration of general insurance / health insurance business.
This year, the Government has taken upon itself to safeguard the interest of the underprivileged and the aged. For the underprivileged, it has promised to provide accidental cover of Rs 2 lakh for just Rs 12 per year and, for people between the age group 18-50, it promised to cover natural and accidental death risk of Rs 2 lakhs for just Rs 330 per year. Adding to this, various pension schemes have been announced in order to assure income to the aging population. With these schemes, Mr. Jaitley has ensured that the Indian populace is not only adequately insured against unforeseen circumstances but also has enough corpus to enjoy life after retirement.
Schemes like Senior Citizens Welfare Fund (from unclaimed corpus of PPF and EPF) along with health care benefits under the Income Tax slab will ensure smooth and healthy lifestyle to the senior and very senior citizens of India. The Digital India campaign will also pave way to a ‘cashless’ ecosystem and give a boost to online sales of insurance policies The move by the government to set a date for GST from April 1st 2016 is encouraging as finally it would enable simplification of the indirect tax structure. However, the increase in the service tax to 14 percent would immediately increase the insurance premiums.
The phased reduction of corporate tax from 30 percent to 25 percent over the 4 years starting from the next financial year is a welcome step as it brings a level of certainty to the tax rates to be expected in the years to come Discouraging the use of cash and encouraging electronic forms of payment is a welcome move for the insurance companies.