Kathmandu. The Government of India has made policy changes as well as allocated substantial budget to meet its ambitious goal of universal insurance coverage by 2047.
The government is opening up a hundred percent investment in insurance companies to benefit from the growing market in India, the world’s most populous country. Earlier, the limit of such investment was 74 percent. This strategic decision is aimed at attracting more capital into the long-term, capital-intensive insurance sector. This ensures that insurers invest all collected premiums within the country.
The Union Cabinet has approved the extension of Pradhan Mantri Bali Bima Yojana and Restructured Weather-based Crop Insurance Scheme till FY 2026. A total budget of Rs 69,515 crore (US $ 8.06 billion) has been allocated for this.
FY 2024. The interim budget of 2025 had set a target of increasing value addition in agriculture and increasing farmers’ income. It plans to increase investment in post-harvest activities, provide financial assistance to 118 million farmers, provide crop insurance to 40 million farmers and promote self-sufficiency in oilseeds.
FY 2025. The Union Budget 26 has proposed to waive goods and services tax on life insurance and health insurance policies. Life insurance policies with a total sum of up to Rs 5 lakh will now be exempted from income tax.
The government has also scrapped 18 percent Goods and Services Tax (GST) on the insurance premium of retail health insurance. In the last financial year 2024, the government collected Rs 16,398 crore from the Goods and Services Tax levied on health care and life insurance.
Of this, Rs 8,135 crore came from life insurance and Rs 8,263 crore from health insurance. In addition, in the last financial year, Rs 2,045 crore was collected as GST from reinsurance on life and health insurance. This includes Rs 561 crore from reinsurance and Rs 1,484 crore from health care.
The government’s flagship initiative for crop insurance, Pradhan Mantri Bali Bima Yojana, has significantly increased the premium subsidy for crop insurance.
Ayushman Bharat (Pradhan Mantri Jan Arogya Yojana) aims to provide health insurance of Rs 5 lakh per family per year for hospitalization.
In the financial year 2023, insurance cover was provided to 44.6 crore people under Pradhan Mantri Suraksha Bima Yojana and Pradhan Mantri Jeevan Jyoti Yojana.
The insurance regulator has introduced a ‘bring and inform’ provision to the insurers to facilitate the introduction of new policies. Under this, the insurer has to inform the regulator only after implementing any new insurance plan.
In 2022, the Government of India sold a 7% stake in Life Insurance Corporation (LIC). The Rs 50,000 crore IPO is India’s largest initial public offering (IPO).
KATHMANDU: Life Insurance Corporation (LIC), the government-owned life insurer with the largest market share, has mobilized women insurers to provide insurance to the doorsteps. The target is to mobilize women volunteer agents at the rate of 1 in each village panchayat inhabited by the target group and community.
India’s Fiscal Year 2023. Insurance penetration was 3.75 percent in terms of GDP. Of this, life insurance accounts for 2.8 percent and non-life insurance accounts for 1 percent.
India is the world’s tenth largest insurance market in terms of premium revenue.
