The Budget is growth oriented and aims to ride the positive momentum in the Indian economy. It continues to focus on the areas of financial inclusion, rural growth, education and infrastructure investment. While inflation continues to remain a concern and increased government spending envisaged in the Budget may continue to put demand-led pressure on prices, the thrust on addressing supply-side bottlenecks is a positive. Last year, service tax was introduced on payments by insurance companies to hospitals, nursing homes or multi-specialty clinics under the health insurance scheme for any health check-up or treatment.
This Budget has enhanced the scope to cover all payments made to the above entities, including maternity homes, sanatoriums, diagnostic centres, etc. Earlier, only cashless payments were under the ambit of service tax; by this change, even reimbursements have been brought under the tax ambit. Effectively, the cost of health care would increase. The Budget has kept the excise duty on automobiles intact, which is a positive for motor insurance as we expect to see continued growth in the automotive sector.
Bhargav Dasgupta
MD & CEO, ICICI Lombard General Insurance
