Leaders of the Indian insurance Industry have hailed the Budget-2023 as positive for the economy which will throw a lot of opportunities for the insurance industry
Devesh Srivastava, CMD, GIC Re
Finance Minister has delivered a holistic and futuristic Budget ensuring the strengthening of our economy. Saptrishi, the seven priorities of Budget 2023 are in support of the government’s ‘Aatmanirbharta’ mission, focusing on Inclusive development, Youth Power, Infrastructure and investment, Financial Sector, and women’s empowerment.
The Finance Minister has yet again taken commendable steps to strengthen our Agriculture sector.
The new ‘Agriculture Accelerator Fund’ will not only motivate our young entrepreneurs in rural areas towards Agri start-ups but also, benefit the farmer by providing innovative and affordable solutions for the challenges faced by them.
Today’s proposal by Finance Minister to raise the capital expenditure target by 33% to Rs. 10 lakh crores, which is 3.3% of the country’s economic output, will shore up demand and consumption in the economy.
This massive capital expenditure planned will give a boost to the reinsurance sector.”
Bhargav Dasgupta, MD & CEO – ICICI Lombard on the Union Budget.
The Union Budget FY23-24 is an extremely progressive and inclusive one with a huge focus on infrastructure and capex growth while maintaining the fiscal consolidation path.
With fiscal deficit being reduced to 5.9% whilst providing an extremely bullish capex investment of Rs. 10 lac crs (highest ever); will in effect convert revenue expenditure to capital expenditure which has a higher multiplier effect. It will also mean net borrowing by the Govt being lower than anticipated at Rs. 11.8 lac crs and that augurs well for the bond market and the corporate sector as a whole.
Moreover with tax relief at an individual level would mean an additional Rs. 35,000 crs available for consumption. Fuelled by ease of doing business related policies and regulations, this will bolster growth especially in the highly regulated financial services space.
For a category like general insurance, these macro-economic indicators would provide the much-needed thrust for bridging the penetration gap in the country.
There are some pertinent developments that will enable growth for the industry in the longer horizon. The focus on tourism will pave the way for not just generating employment and investments but also travel insurance in the long term.
We have always been zealot about capacity and capability building in health arena and Govt setting up nursing colleges is a positive development.
Infact, I believe the CoE on AI being set up could be a game changer with access to right talent pool in India. On the auto front, the old vehicle and ambulance scrapping policy is a step in the right direction.
Overall, the budget this year has been growth oriented while also being fiscally responsible which is laudable.
Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance
The Union Budget is an all-inclusive progressive budget with a strong impetus on growth and development, which will augment the Indian economy towards achieving its goal of becoming a $ 5 Trillion economy.
Once again, a renewed stress on job creation and skill development has been put forth. The proposed ecosystem for the agricultural space will be a game changer for our farmer friends and will enhance their ability to get more significant insights, tools, and materials. It will also help them gain access to credit and insurance in a big way.
Direct tax for individuals has been further simplified, and the enhancement of rebate for resident individuals under the new regime is a welcome move.
What impresses me more is the move towards increased outlay for infrastructure, which compliments the announcement of surety bond insurance in the last budget and lays the foundation for a strong, connected India.
Sreedhar, MD & CEO, Royal Sundaram General Insurance Co. Ltd
A host of initiatives around data and information repositories (National Financial Information Registry, Common Business Identifier, KYC Simplification, Central Data Processing Centre, etc.) will lead to an efficient, secured and integrated data access ecosystem.
The Insurance sector will gain from the increased economic activities and greater ease of doing business. At the same time, announcements such as vehicle replacement policy, Digital Public Infrastructure for Agriculture, a higher rebate on personal income tax and a more significant focus on public health will also substantially impact the non-life insurance sector.
Being now the most populous country in the world, India has built a robust foundation comprising of demographic dividend, economic stability, tamed inflation, improved incomes, phygital distribution network and above all, better awareness towards insurance.
The success of health insurance in the past decade – backed by strong government resolve to offer low-cost access has set the right context for the sector. We believe the industry has just scratched the surface and will ride on a high degree of customisation and product innovation in the coming years.
Ankur Nijhawan, CEO, AXA France Vie India Reinsurance Branch
Budget allocation towards research in pharma and health is a step in the right direction which would further make India atmanirbhar. Budget has also very aptly recognised the importance of AI by allocation of funds towards setting up of specialised AI centres in educational institutes which would enable finding solutions in agri, health and sustainable cities.
Reduction in duties on goods for manufacturing lithium-ion batteries would be a major step to reduce cost of EVs and promote green growth.
Further, change in the income tax slabs is a major development towards making India a more consumer driven economy. It would leave more money in the hands of individuals giving them the liberty and power to decide where to spend. The new tax regime does not allow exemptions on savings like the earlier one.
This change poses a major need for sectors like insurance to create a product which is consumer focused. Consumer has so far been buying it to avail tax incentives however, this new change demands that the sector revamp its offering to meet consumer expectations and servicing requirements to create demand by offering customised, user friendly offerings and improving the customer experience.
Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance
Overall, the Budget has been very positive with fiscal prudence and with a clear focus on overall growth. As India continues to strengthen its economy, this Budget has laid the foundation for long-term growth across all sectors – for agriculture, fintech, infrastructure, social welfare, tourism and so on. It is balanced well with both Capex and consumption push. The fiscal deficit consolidation to continue from 6.4% of GDP for FY 23 to 5.9% in FY24.
From the financial services perspective, initiatives such as KYC simplification and the larger push within the digital eco-system will benefit us.
The new tax regime has been made more attractive by introducing standard deduction of Rs 50,000 that was earlier available only under the old tax regime (for salaried individuals) and changing the income tax slabs.
Further, under the new tax regime, rebate limit has been increased from Rs 5L to 7L (implying that individuals with income of up to Rs 7 lakh will not have to pay personal income tax).
Mahesh Balasubramanian, Managing Director, Kotak Mahindra Life Insurance
Aligned with popular expectations, the budget has placed the right impetus on key focus areas towards strengthening the India growth story.
Right from adhering to a fiscal prudence and charting a clear road map for fiscal deficit by sticking to 4.5% of GDP till FY26, emphasis on Capex outlay of Rs 10 trillion, focus on green growth, agri credit of Rs 20 trillion, rural and social sectors with push for infrastructure creation, initiatives for ease of doing business by reducing and consolidating 39,000 laws and relief in personal income tax, the budget provides the right impetus for the India as it strengthen its position among global economies.
The budget has also been good for the consumers, especially middle-class which will help spur spending, increasing consumption and demand thus helping the overall economy.”
Anup Rau, MD & CEO, Future Generali India Insurance:
Union Budget remains in line with the Government’s growth objectives. The focus is on strengthening the foundation regarding inclusive development, reaching the last mile and financial empowerment.
Some key areas insurance companies will be closely looking at going forward are the proposed investments by the Government in technology and AI, data governance policy, simplified KYC process, common business identifier and MSME sector-related initiatives. In addition, various announcements related to infrastructure investment, including sustainable cities and green energy, will also open new avenues for the sector to mitigate and insure against potential risks.
The additional income in the hands of the taxpayer owing to the expansion of the personal income tax ceiling too is likely to boost consumption. Overall, a very balanced budget”.
Srikanth Kandikonda, Chief Financial Officer, ManipalCigna Health Insurance
The major announcements in the tax slabs by the Finance Minister will positively influence the salaried class in the country. Also, increase in the saving schemes for senior citizens and no tax for income up to Rs 7 lakh boosted the sentiments across young and vulnerable sections of the society.
The new reforms proposed are expected to increase the disposable income in the pockets of the working class, which will result in higher savings, spends and investments.
In addition to these positive steps, if the government would have considered reduction in the GST rate on health insurance premium and increase the limit of tax deduction for health insurance under section 80D, these initiatives would have further helped millions of people access quality healthcare at an affordable cost.
Nonetheless, this first budget of Amrit Kal has presented opportunities for the betterment of the citizens, which will definitely contribute towards the overall growth across the sectors, including insurance, and will improve the overall financial well-being of people at large.