For businesses in India, the Union Budget each year is one of the most sought after events, even more important than an India Pakistan cricket match. Much like an exciting cricket match, it is awaited with hope, expectations, nervous moments and a whole lot of excitement. This year is no different. In light of the government’s ‘Make in India’ initiative and other similar steps being taken to help grow businesses in India, we in the Startup world are indeed very expectant and hopeful, even more so this year!
Here’s my list of key expectations:
1) Start-ups like ours at Coverfox.com, the insurance sector and specifically fintech companies, generally, have a heavy dependence on domestic capital, which is typically risk-averse, and hence scarce. The budget should consider ways to incentivize domestic capital in these market spaces. The Budget should also consider relaxation in structures which make private secondary transactions more liquid from a tax or complication perspective.
2) Encourage small and medium businesses to cover employees under group health and accident insurance schemes. If service tax is removed on these plans, and tax deductions on this class of employee expenditure, it would play a significant role in securing the most vulnerable. Case in point, in the recent Chennai floods, more than 57,000 houses were damaged - most of them reported to be in pincodes that housed working class people. Data says only 10% of them were covered. To increase awareness and encourage uptake of property insurance, insurance premiums for home and small shops should be exempted from income tax.
3) Consideration of tax breaks or tax incentives on office property insurance and home insurance for the people below a threshold economic level, who work at these places (below a certain economic level).
4) In the last few years, the government has taken several good measures to help penetration of insurance in our economy and has been well received. However, there is still a great need to make insurance affordable for all segments of society. Improved penetration of insurance in India will lead to a more secured life for everyone and help the economy overall. To this effect, the Union Budget 2016 should make health insurance, accidental disability insurance premiums more affordable for the masses by waiving off the service tax of 14.5%.
5) The Prime Minister has stressed on the importance of an accidental disability cover as part of Social Security through various schemes like Pradhan Mantri Suraksha Bima Yojana and Jan Dhan Yojana. To promote Accident Disability Insurance the expenditure incurred to cover this insurance should be included in the 80D or 80C deduction as well.
6) Moreover, we expect increased push in the budget towards creating a universal healthcare ecosystem built on facilitating healthcare financing, instead of investing on its own healthcare facilities. To ensure healthcare is accessible, affordable, the Government should, apart from introducing healthcare regulations, ensure that healthcare expenditure of the lower economic and working class is financed through government funded/facilitated health insurance programs.
Now that I’ve made my list of key expectations, the important question to ask is are you listening, Mr Finance Minister Jaitley? We, on this side, will surely be all ears on the 29th Feb!
(The author Varun Dua is the CEO and founder of Coverfox Insurance)
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