The central government may reduce GST on insurance products. The parliamentary panel, chaired by Jayant Sinha, has recommended this. GST needs to be reduced, especially on health and term insurance. At present, it is 18 percent. The committee has suggested that the GST rate on microinsurance and health insurance should be less than 18 per cent. Senior citizens need this more.
When the GST rate is high, a premium must be paid on insurance, so poor people cannot take insurance policies. This is why it has been recommended to make insurance affordable.
According to news agency ANI, the committee presented its report in Parliament on Tuesday. The report states that the premium burden will increase due to the high GST rate, making it difficult to take an insurance policy. The committee recommends making insurance policies more affordable.
What Else Is Said In The Recommendation
The committee has recommended reducing the GST rates applicable to health insurance products, especially retail and micro insurance policies for senior citizens. Apart from this, term policies can also be reduced. However, the insurance industry in India has grown rapidly in recent years. Total insurance premiums have increased, the reason for which does the government do the reforms. However, its reach is still low.
How Many People Have Insurance Coverage?
Let us tell you that the insurance industry is growing in India. Despite this, only 3 per cent of the people here have insurance coverage due to the large population. The recommendation of the parliamentary committee is only to increase the insurance coverage. India ranks 10th in the world in terms of insurance business.
In 2020, India was ranked 11th. At the same time, insurance premiums are also increasing, which is difficult for common people to pay. The insurance business in India has boomed in recent years.
The Country Has A Long Way To Go
According to a media report, India’s share in the worldwide insurance market in 2020 was about 2 per cent. Much work must be done to bring it up to par with the world’s developed countries.
According to the data, India ranked 10th in the global insurance business, with a market share of 1.85 percent in 2021. India’s share in 2020 was 1.78 percent. India still has a long way to go in this area. In 2021, India ranked 9th in the life insurance business. Meanwhile, in non-life insurance, India ranked 14th in the world.
At the same time, the committee has discussed strengthening the financial position of four government-sector insurance companies. The report says that these companies have less capital and suffer more losses. Health insurance accounts for more than 50 per cent of their total business.
