Budget 2024: Health insurers seek more attractive tax incentives—and a health regulator
Mint spoke with industry experts for their recommendations on what Sitharaman, in her second term as India's finance minister, could include in her full-year budget for FY25 next month.The Union government in its interim budget allocated ₹90,171 crore to the health sector for the financial year 2024-25, up from ₹79,221 crore in FY24. But the industry still feels this is low.“The National Health Policy has proposed an increase in public expenditure on healthcare to 2.5% of GDP by 2025.
Despite some progress over the years, India’s healthcare spending is still low compared to the global average, necessitating a substantial boost in healthcare spends," said Prasun Sikdar, managing director and chief executive of ManipalCigna Health Insurance.“Thus, in the upcoming union budget, we expect the finance minister to announce higher allocation of funds for healthcare compared to what was proposed in interim budget to meet the targets of the National Health Policy."Health insurance is a necessity. With the rising medical inflation, hospitalisation costs have surged.
That, in turn, has caused a steep jump in health insurance premiums, more so for senior citizens. Customers have to pay 18% goods and services tax (GST) on the premiums.“To enable better retail health insurance penetration, the government can consider categorising them (senior citizens) under a separate HSN code and lowering the tax to 5%," says Parimal Heda, chief investment officer, GoDigit General Insurance.
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