Insurance is an important social security tool which is closely linked to our economy. Right from insuring the backbone of our economy i.e. the farmers through crop insurance to taking care of new-age risks like cyber threats through cyber insurance, insurance is there to safeguard most of the risks we face today.
Hence, I believe it becomes even more crucial to provide a much-needed boost to the industry in the form of the below measures to continue safeguarding both the economy and the society against unforeseen risks.
On the direct tax front for individuals, I feel Government should provide tax exemption to the people opting for home insurance. Thus, providing them with much-needed motivation especially in the light of increasing natural calamities, which leave people stranded. This may be done by providing a separate limit over and above the already savings biased 80C limit.
On the indirect tax piece, there is a direct need for Government to reduce the GST rates on insurance premium given the low insurance penetration in India and the fact that insurance is intended to provide financial support against any sudden human or economic loss.
The above measures I believe will go a long way in not only making the insurance industry more favourable, but also lead to increase in penetration of insurance with appropriate support from all the stakeholders.
(The author is MD & CEO, Bajaj Allianz General Insurance)
(Published 29 January 2021, 17:08 IST)
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