Budget 2023: The year 2022 was good for the insurance sector. IRDAI took many reform steps for the industry. The government also tried to open the industry. Measures were taken to provide more options to policyholders. In last year’s budget, the government increased the FDI limit in industry to 74 percent. This was a big step to increase the reach of insurance products in the country. Experts say that the government will have to continue efforts to increase the reach of insurance. Currently, compared to developed countries, insurance in India is accessible to a very small portion of the population. Finance Minister Nirmala Sitharaman will present the Union Budget on 1 February. It is expected that she will make many big announcements for the insurance industry.
Experts say that the government can take steps to further open the insurance sector. There is also a need to simplify the rules. Making amendments in the Insurance Act and Insurance Regulatory and Development Act will increase the growth of this industry. The government can take steps to issue composite licenses to insurance companies and make health insurance as mandatory as motor insurance.
Insurance industry experts say that there is a need to reduce GST on the premium of life insurance products. Currently it is 18 percent. It needs to be reduced to 5 percent. This will make insurance products cheaper. This will increase people’s interest in buying insurance products. Currently, it is difficult for low income people to buy insurance products. Health insurance products, in particular, are beyond the reach of a large section of the population. Making them cheaper will increase their reach.
Also read: Budget 2023: This is a big opportunity for the government to make tax rules easier and attractive.
The Finance Minister should also announce increase in the deduction limit under Section 80CCC. Currently this limit is Rs 1.5 lakh. It needs to be increased to Rs 2.5 lakh. Under this section, tax deduction is available on contributions to specific PPF, life and pension funds. There is also a need to increase the deduction limit of health insurance. The deduction limit on health policy under Section 80D is currently Rs 25,000. It needs to be increased to Rs 1 lakh.