In the coming days, insurance may become cheaper in the country, due to which their popularity and acceptance is likely to increase. In fact, a committee of Parliament has advocated making insurance, especially health insurance, affordable for the common people. If the recommendations of the committee are accepted then the way for insurance to become cheaper will be cleared.
The parliamentary committee made this recommendation
The committee says that various insurance products, especially health and In the case of term insurance, Goods and Services Tax rates should be rationalized. The parliamentary committee believes that at present the GST rate on insurance products is high, due to which the premium burden on people is increasing. There is a need to reduce the GST rates to make them affordable for the common people.
Committee led by Jayant Sinha
Parliamentary committee led by former Minister of State for Finance Jayant Sinha. has prepared its recommendations after discussing with representatives of the insurance industry, officials of insurance regulator IRDAI and officials of the Finance Ministry. The Parliamentary Committee on Financial Affairs was looking for ways to strengthen the insurance scenario in the country.
Currently the GST rate is 18 percent
The Parliamentary Committee said in its recommendations that To make insurance more affordable for people, there is a need to reduce GST, especially in the case of health insurance. GST rates can be reduced for retail policies for senior citizens, microinsurance policies with limits up to Rs 5 lakh and term insurance policies. Currently, GST rate of 18 percent is applicable on insurance products.
40-50 thousand crore rupees needed
The committee also admitted that the penetration of insurance in the country is still very low. . To overcome this situation of underinsurance, capital of Rs 40 to 50 thousand crore may be required. For this, the committee has suggested that the Reserve Bank, on behalf of the Government of India, can issue on-tap bonds in different maturity periods up to 50 years. These bonds can be issued by insurance companies against the current maximum tenure of investment of 40 years.
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