The first budget of the new government of Modi 3.0 is expected to have more tax incentives for health insurance, easier payment terms for MSMEs and subsidies for agri-tech sector according to the stakeholders.
On July 23, Finance Minister Nirmala Sitharaman will present the full Budget for fiscal 2024-25 which will be the first policy document of the new government.
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Anup Rau, CEO & Executive Director at Future Generali India Insurance Company said “the limit on deductions for health insurance premiums under Section 80D of the Income Tax Act” should be raised because it has been static for last nine years despite escalating medical costs nationwide.
“We would prefer a limit that follows inflation and gets revised automatically every year or once in two years, as it happens with some countries. Moreover, this benefit needs to be extended even under New Tax Regime since increasing health insurance penetration is critical. Therefore, we hope that upcoming Budget may declare certain increase in ‘deduction limit’ on health premium,” explained Rau.
Tapan Singhel, MD & CEO Bajaj Allianz General Insurance said making heal th insurance more affordable and accessible is possible through reforms such as offering health insurances to employees at negotiated rates instead of a high GST tax rate on such products as well as providing tax benefits e.g. enhanced Section 80D exemption limits which can only support those within ‘missing middle’ group amongst our citizens.
“Also removal of limit on deduction allowed u/s 80D towards Health Insurance Premium paid by Senior Citizen would go along way in reducing financial burden on many an Indian,” added Mr. Singhel.
According to sources close to the finance ministry, Ms Sitharaman is expected to lay out economic agenda in her maiden budget speech next month.
RGCIRC’s CEO D S Negi says that focus should be on reforming cancer care in the country and the need to fund more advanced treatments like immunotherapy and personalised medicine in the budget.
“Extending Ayushman Bharat to those aged above 70 years will be highly beneficial for senior citizens. However, the current coverage limit of ₹5 lakh may not be sufficient for critical illnesses such as cancer, where treatment costs can range from ₹15-20 lakh.
“Therefore, it is essential to consider increasing the coverage limit for critical illnesses like cancer to ensure adequate financial support for cancer patients,” added Mr. Negi.
The budget will announce steps towards fast tracking reforms that will help India become a US$5 trillion economy in near future and turn India into a “Viksit Bharat” by 2047.
MTaI Chairman Pavan Choudary said before the budget that India has one of the highest taxes and customs duties on medical devices which is impacting patient affordability.
“On the other hand, countries like Singapore, Hong Kong, Italy and Norway have no such duties. Similarly Australia and Japan levy nominal duties at just 0.5 per cent while United States levies 2 per cent duty and China charges 3 per cent.”
He mentioned, “It increases the risks of smuggling medical devices by illegal ways to India due to absence of legal and service warranties.” “In addition, such kind of trade would erode tariff revenues for the Indian government,” he added.
Vivek Jalan, Partner at Tax Connect Advisory Services LLP said that Income Tax Act has inserted Section 43B (h) as per the recommendations of Micro, Small & Medium Enterprises (MSMEs) since AY 24-25. However, the disallowance for payables under sections 43B (h) has been aligned with the MSME Act which requires that payment should be made to an SME within a maximum period of 45 days.
“This is hard in current day commerce where credit periods from 60-90 days are normal.”
“Thus there is a hope that this provision will be relaxed/amended aligning the same with CGST Act w.r.t. disallowance when payment to SMEs is not made within 180 days” Consequently if a taxpayer fails to pay an SME within one hundred eighty days then this expenditure may be add back to his income,” he said.
Saurabh Rai, CEO at Arahas expressed great expectations on huge investment in sustainability and geospatial technology especially ahead of budget presentation.
“I anticipate significant amounts being set aside for renewable energy projects and incentives given out for use by businesses into green technologies,” he remarked.
In addition, Mr. Rai asserted that promoting agri-tech innovations; giving tax breaks to tech companies and investing in human capital development were critical drivers towards sustainable growth.
Sanjay Kumar, Founder and CEO of Geospatial World explained it is important that dedicated funds are allocated digital twin technology in Union Budget so as to harness its full power.
“This allocation would facilitate wide spread adoption of digital twins leading to efficiency gains cost savings and better decision making in infrastructure projects. If India invests in this technology it can realize significant long term benefits such as enhanced asset management, reduced downtime and greater resilience to environmental challenges,” he said.
In the second tenure of the Modi government after the 2019 general elections, Ms. Sitharaman was given charge of the finance portfolio making her the first full-time woman Finance Minister in independent India.
