CHENNAI, JAN 18
As the interim Union Budget 2024 approaches, industry captains are expecting multiple measures to propel the industry forward. Some of them want Budget 2024 to be another elixir to sustain the current pace of economic growth while some others look more for policy reforms and fiscal support for initiatives that are aimed at enhancing India’s insurance penetration. Amendments can be made to Section 80D to increase the deduction limit for medical insurance premiums and providing tax incentives or subsidizing the cost of insurance can go a long way to ensure the country is secured, say some. NBFCs eagerly await financial support and acknowledgment of their positive contributions. They feel that such kind of measures are essential for further strengthening of the economy and inclusive growth.
The focal point would continue to be uplift and growth of the bottom of the pyramid by way of announcing some welfare measures on rural/Agri schemes: Niraj Kumar, Chief Investment Officer, Future Generali India Life Insurance Company Ltd.
“With Budget 2023 being characterized as a Pro growth and Capex oriented budget, we reckon Budget 2024 to be another elixir to sustain the current pace of economic growth. The government will adeptly do a fine balancing act of sticking to the fiscal prudence path, while focusing on pro-growth measures. With the backdrop of India’s goldilocks economic landscape viz. receding inflation, resilient GDP growth, contained CAD, the Interim Budget 2024 is likely to leverage on the same and try to pump prime the economy. The focus will continue to be on structural growth enablers such as continuing focus on infrastructure, additional sectors under PLI (production-linked incentive) scheme for manufacturing push and sustained push towards green energy transition. The budgeted capex orientation is likely to stay although the growth is likely to moderate from its peak 35% growth seen in the recent past. Besides with the impending pivot of Monetary policy towards the rate cut cycle, the fiscal pro-growth measures would get the requisite support and manifest in the growth numbers. Importantly as it’s a Pre-election Interim Budget, the focal point would continue to be uplift and growth of the bottom of the pyramid by way of announcing some welfare measures on rural / Agri schemes. Overall, we expect the budget to give the requisite structural push for economic growth.”
Amend Section 80D to increase the deduction limit for medical insurance premiums: Sharad Mathur, Managing Director & Chief Executive Officer, Universal Sompo General Insurance Company Limited
“As Indian insurers leverage advanced technologies like data analysis, IoT, and Artificial Intelligence to innovate and offer customized insurance solutions, the insurance sector’s crucial expectation would be to see more policy reforms and fiscal support for initiatives that are aimed at enhancing India’s insurance penetration. To fulfil the vision of ‘Insurance for All by 2047’, it will be crucial to improve insurance awareness among the masses and encourage citizens to enhance their insurance coverage. While IRDAI’s Bima Vahak, Bima Vistaar and Bima Sugam initiatives are indeed great and touted to give a big fillip to the insurance inclusion objective, extending further tax benefits on the purchase of insurance products should greatly support achieving the objective. To encourage the insured population to improve their insurance coverage, amendments can be made to Section 80D to increase the deduction limit for medical insurance premiums by a quantum of Rs 25,000 for both individuals and senior citizens. Similarly, in order to improve insurance uptake of the Pradhanmantri Jeevan Jyoti Bima Yojna and make insurance more affordable, the Goods and Services Tax (GST) on such essential term insurance policies can be reduced or set to 0%. These measures should serve to lower insurance premiums and support more Indians in financially securing their future. Finally, in a bid to incentivize first-time retail investors to invest in India’s equity schemes, consideration can be made to reintroduce Section 80CCG and motivate the youth to kickstart their wealth creation journey.”
Providing tax incentives or subsidizing the cost of insurance can go a long way to ensure the country is secured: Anuj Parekh – Cofounder and CEO at Bharatsure
“Nearly 90 crore Indians are today without a health insurance. It will be difficult for the government alone to address this gap by itself. Based on what has worked across the globe, Group insurance particularly employee sponsored insurance can become a catalyst that helps in increasing penetration and awareness. Despite COVID, there is still a resistance to buy a personal health insurance policy and therefore promoting employer sponsored group insurance can help India address the health security gap in the country. Providing tax incentives or subsidizing the cost of insurance can go a long way to ensure the country is secured.”
Incentivize global manufacturers to set up shops in India as they look to reduce dependence on China: Mohit Ralhan – Chief Executive Officer, TIW Capital
“India’s growth outlook remains robust despite a highly uncertain global macroeconomic environment. The interim budget will be focused on sustaining the growth momentum without compromising on the glide towards a 4.5% fiscal deficit to GDP by FY 2026 from the budgeted 5.9% in this fiscal.
One area of opportunity could be to incentivize global manufacturers to set up shops in India as they look to reduce dependence on China. To achieve this, the finance minister could broaden the scope of PLI scheme beneficiaries. This will not only boost our exports, which are under pressure due to a slowdown in major economies but also lead to employment generation in non-metros.
Over the last 5 years, the government has prioritised spending on infrastructure. This is likely to continue. While roads and railways will continue to be big beneficiaries, allocation towards power might increase this year. Achieving energy security in a highly uncertain geopolitical environment will gain precedence.
The startup ecosystem has been facing a funding crunch for some time. To ameliorate this, the government could increase the allocation to Fund of funds and the Start-up India Seed Fund. Incentivizes could be announced for ventures in tie-ups with academia such as in the AI space. Measures could be announced to reduce the compliance burden on funds and angel investors. The finance minister could also offer some clarity on ESOP taxation.”
Tax efficiency is the need of the hour for growing debt capital markets in India: Saurav Ghosh, Co-Founder, Jiraaf
“In a bid to boost retail investments, expectations are rife that the Government will undertake both direct and indirect tax reductions. Tax efficiency is the need of the hour for growing debt capital markets in India. This would help retail investors to begin their investing journey in debt and thereby build more stable and well-balanced financial portfolios.
Ultimately, this should spur more capital investment in critical and sunrise sectors of the Indian economy and fuel the current growth momentum.”
NBFCs eagerly await financial support and acknowledgment of their positive contributions: Nikunj Agarwal, Head Debt & Lending Alliances, Propelld
“In light of the 2024 election, expectations are subdued regarding major shake-ups in the upcoming Interim Budget-24. However, there’s a strong call for measures to support liquidity ease for new age financial players, particularly the NBFCs, serving as a lifeline for those struggling to access financial services. Additionally, the global spotlight on ESG practices—focusing on environmental, social, and governance aspects—raises hopes for added incentives for financial institutions championing these causes. NBFCs eagerly await financial support and acknowledgment of their positive contributions. If implemented, could potentially fortify the further sustained and inclusive growth.”
Lower the TDS rate from 1% to 0.01%: Sumit Gupta, Co-founder CoinDCX
“In the midst of India’s burgeoning VDA industry, the forthcoming Union Budget presents a pivotal opportunity to propel its growth. A strategic focus on significant measures, such as lowering the TDS rate from 1% to 0.01% and aligning the tax rate with the framework applicable to other assets by reducing it from 30%, would undoubtedly invigorate the sector.
Additionally, contemplating the establishment of a robust self-regulatory body for crypto and blockchain sector participants could be a game-changer. This proactive step aligns with the government’s vision of ‘Digital India’ and positions India as a global player in the ‘Make in India’ narrative and recognising the vast economic and job creation potential inherent in web3 and blockchain technologies. These measures have the potential to expedite our journey towards achieving the 5 trillion-dollar economy sooner than anticipated. By implementing a standardized regulatory framework for the crypto and blockchain sectors, the government would not only provide clarity but also unlock a multitude of opportunities and use cases at a global scale, empowering India Inc to lead on the world stage.”
Tangible focus on financial literacy, especially in rural areas is need of the hour: Aalesh Avlani, Director & Co-Founder, Credit Wise Capital
“What I want to see in this year’s budget is a tangible focus on financial literacy, especially in rural areas. Customized lending, using generative AI will be the underlying theme in 2024. Affordable data plans, simplified tax filing for gig workers, and wider adoption of UPI for everyday transactions are some other aspects that need to be at the core in this year’s annual budget.”
