Revolutionizing Healthcare and Insurance: A Look into Budget 2025 Expectations

As the Union Budget 2025 approaches, the State Bank of India (SBI) has put forward a compelling case for the government to prioritize the healthcare and insurance sectors. The SBI report suggests a significant increase in healthcare spending, aiming for 5% of GDP, alongside tax exemptions on health and term insurance premiums to stimulate growth in these critical areas.

Insurance Sector Reforms: A Path Forward

With insurance penetration witnessing a decline, the SBI report emphasizes the importance of tax exemptions and a separate deduction for life and health insurance premiums under both the old and new tax regimes. This move is seen as crucial for achieving the IRDAI's vision of "Insurance for All by 2047."

Unified Pension Schemes and MSME Insurance

The report also highlights the need for integrating government-backed pension schemes under a unified framework and introducing special insurance schemes for MSME employees and promoters. These measures aim to enhance social security and protect against unforeseen losses.

Healthcare Funding and GST Rationalization

Proposing a hike in public healthcare funding to 5% of GDP, the report suggests financing this increase through a higher GST on tobacco and sugary products. Additionally, it advocates for rationalizing GST rates on medical devices to a uniform 5%-12% to reduce costs and simplify compliance.

These strategic reforms are essential for addressing India's growing healthcare needs and ensuring economic stability and improved well-being for its citizens.