The government is embarking on a path of aggressive infrastructure build out by boosting government spending, announcement of landmark expenditure reforms aimed at substantial declines in delivery cost of subsidies and re-direct corresponding savings towards infrastructure creation and re-orient focus from fiscal deficit towards revenue deficit, in an effort to create room for more productive capital expenditure.
As this budget would be the first full-fledged budget by the Finance Minister, expectations across industries are quite high. Last year’s budget was progressive and forward looking and clearly exhibits the new government’s understanding of the impending needs to fuel economic growth through righteous allocation of funds and impetus to foreign investment. Key thrust on improving the rural economy with focus on development programmes, FDI hike, enhancement of quality healthcare rounded up as an ideal budget.
This year, a growth-oriented budget, with a focus on health assurance and an overall increase in financial inclusion and consumer awareness are the wish list from this years’ union budget.
Health Insurance being a relatively new idea is evolving and must innovatively and creatively face the challenges of lack of access and affordability, health/medical inflation, unavailability of skilled manpower among other barriers and roadblocks.It is therefore, every Indian’s need to have access to an all-inclusive and quality healthcare system. Innovations across all touch points will be harbinger of growth and will help us accomplish our mission of getting to universal health insurance coverage in India.
The growing awareness coupled with the rising affluence is resulting in an increased demand for health insurance in the country. For consumers, exemption of service tax from Health Insurance premium and increasing the tax exemption slab for premium paid will be a stimulus to the industry’s growth. Forthcoming budget should take small steps such as removing service tax on health insurance premium, increasing deduction limit under section 80D to increase penetration of insurance.Health insurance is still looked upon only as a secondary option to other investments by most consumers because of lack of awareness, lower tax exemption or as a stress purchase. Therefore tax benefits on healthcare insurance would help nurture a culture of preventive healthcare in India. However, affordability and awareness still plagues our growth.
India’s current healthcare system is one of the most privatized globally, with the private sector providing eighty percent of outpatient care, resulting in catastrophic out of pocket expenses for people with a low income.People need to understand that with inflation in healthcare costs and increase in the incidence of lifestyle diseases, health insurance will be beneficial in covering the treatment cost. All this will ultimately free the current out-of-pocket spending and channel funds toward far more productive uses, while strengthening the public health-care system.
The defeat of the BJP in the Delhi Assembly elections will not slow down the pace of economic reforms, Finance Minister Arun Jaitley asserted today. In his first comments after the near-whitewash of his party in the Delhi polls, he said the government was determined to go ahead on the path of economic reforms.
“The fact that four (state assembly) elections have been won and one has not been won is absolutely no ground for believing that there will be any slowdown on the path which we have undertaken,” he said while addressing a joint press conference with US Treasury Secretary Jacob Lew at the end of 5th Indo-US Economic and Financial Partnership meeting.
Jaitley’s comments assume significance against the backdrop of experts raising questions whether the government would resort to populism in the wake of electoral reverse. The kind of reforms that the government has been undertaking, he said, would bring in investment, generate jobs, improve the quality of life of people and also help in alleviating poverty. Jaitley is scheduled to present his first full budget for 2015-16 on February 28 which among other things will unveil government’s strategy to boost economic growth.
The BJP suffered a crushing defeat in the Delhi Assembly election winning only three out of the 70 seats. Ever since its spectacular victory in the May Parliament elections, the BJP notched power in Haryana, Maharashtra, Jharkhand and emerged the second largest party in Jammu and Kashmir. Since coming to power in May last, the government has taken a slew of economic reforms, especially easing of the foreign investment norms.
Infrastructure would be one of the major focused sector in Union Budget 2015-16. Removal of MAT & inverted duty structure and more infrastructure funds would be major drivers for infrastructure sector.
Currently, MAT nearly negates the benefit of Sec 80 IA, removal would help bump up returns on infrastructure projects by deferring cash outflows, say the brokerage in its expectations note. Removal of (or reduction in) the inverted duty structure in some capital goods sector would help Make in India theme (announced by Narendra Modi last year), by making value addition more profitable.
If the government announces further setting up of infra funds, then that would help companies get more funds.