Relief for Indians
The government's recent GST changes on health and life insurance aim to make premiums cheaper. Sanjiv Bajaj of BajajCapital highlighted this move as a welcome
step, particularly given rising healthcare costs. The goal is to make insurance more accessible, in line with the 'Insurance for All by 2047' vision, making it affordable and essential for everyone in India.
GST Structure Concerns
The Finance Minister has dismissed the possibility of a single-rate GST structure in the near future. She explained that India's diverse economy and varying levels of development make it impractical. Her comparison of a Mercedes Benz and 'Hawai chappals' illustrates the complexities of applying a uniform tax rate across different economic realities in the country.
Focus on the People
Sitharaman emphasized that the tax benefits are designed to benefit the public, not the insurance companies. She stated that the government would engage with insurance providers if the cost savings are not passed on to consumers. This action is part of the government’s commitment to boost insurance penetration throughout India and to lower the burden on the common man.
Industry Reaction
Public sector insurance companies have already pledged to pass on the GST benefits. Discussions are underway with private insurance players. The Finance Minister noted that, as insurance is an open market, she expects private players to also pass on the benefits to their customers, thus giving the Indian public access to affordable insurance.
