‘Budget focusses on empowering people’

Parimal Heda

The Interim Budget presented by the Finance Minister is largely in line with expectations moving ahead on the fiscal consolidation path. The budget’s focus was on empowering people and thereby to create a pathway towards the government’s objective of a Viksit Bharat by 2047. Though no direct announcements were made related to the insurance sector, various measures announced by the FM will have a trickle-down effect in multi-fold ways.

Ayushman Bharat
Expanding the scope of the Ayushman Bharat health insurance coverage to all ASHA workers, Anganwadi workers and helpers will bring an additional over 3 million health workers under the insurance umbrella and is a thoughtful token of appreciation to this community that acted as the frontline workers during the Covid pandemic. The social security this provides will aid in redefining healthcare in our country and further strengthen the grassroot-level healthcare ecosystem on a whole. However, expanding the scope of insurance coverage from the current Rs 5 lakh to Rs 10 lakh in the future can ensure this vulnerable segment is adequately protected against rising medical inflation and healthcare costs in the future.

Fillip to EV Sector
The government’s resolve to support the manufacturing and charging infrastructure of the electric vehicle ecosystem will surely provide a fillip to the Niti Aayog’s EV penetration target of 30-35 per cent by FY30. This will aid in driving EV volumes in the country and will have an ancillary effect on the adoption of EV insurance in the country. The insurance industry is already well-prepared to meet this rising demand through launch of EV-specific motor insurance coverage, providing adequate protection to the specific risks associated with EVs compared to Internal Combustion Engine (ICE) vehicles.

Preventive Healthcare
The announcement to encourage cervical cancer vaccination for girls in age group of 9 to 14 years shows the government’s intent to improve preventive healthcare in the country. Cervical cancer contributes to approximately 6–29% of all cancers in Indian women, the treatment for which can be very expensive. Encouraging early vaccination will help in nipping the issue of rising cervical cancer cases in the bud. The announcements made towards managing immunization and nutrition delivery for maternal and child healthcare also clearly establishes the government’s intent of creating a robust preventive healthcare ecosystem in the country. All these measures will lessen the burden on hospitalizations and subsequently on the health insurance sector in the long term.

Boost to Tourism
Giving boost to spiritual tourism, developing, and rebranding iconic tourist centres at a global level and taking up projects to improve port connectivity and tourism infrastructure, especially in islands like Lakshadweep, will significantly boost domestic tourism and make India among the top holiday destinations globally. This will also act as a catalyst to India’s travel insurance market. The domestic travel insurance market saw a premium growth of 67.6% YoY in FY23. These measures announced by the government will have an auxiliary effect on the travel insurance sector and end up seeing further growth as a result.

Parimal Heda, Chief Investment Officer, Digit General Insurance