Quick Overview
As the Union Budget 2025 approaches, various sectors, including insurance, healthcare, retail, and MSMEs, are voicing their expectations for reforms aimed at enhancing economic growth and addressing pressing issues such as affordability, sustainability, and compliance. Key proposals include tax reforms, regulatory changes, and increased budgetary allocations to improve public infrastructure and support innovation.
Key Points
Insurance Sector Reforms:
Industry leaders are advocating for reductions in GST on health insurance premiums, increased tax exemptions, and the establishment of a dedicated health regulator.
Support for MSMEs:
Calls for tax breaks, simplified GST structures, and low-interest loans are emphasized to help MSME retailers overcome operational challenges.
Sustainability in Retail:
The retail industry seeks funding for skill development and incentives for adopting sustainable practices.
Economic Slowdown Response:
The Congress party demands bold measures to address economic challenges, including income support and tax relief for the middle class.
Real Estate and Green Hydrogen Initiatives:
Proposals for tax exemptions and incentives are made to stimulate growth in the real estate sector and promote the green hydrogen industry.
Detailed Breakdown
1. Insurance Sector Reforms
The insurance sector is pushing for critical reforms to enhance health coverage and make it more affordable. Key proposals include:
- Reduction in GST: Current high GST rates on health insurance premiums are seen as a barrier to adequate insurance coverage, especially for the “missing middle” population. Industry leaders argue that health insurance should be treated as an essential service.
- Dedicated Health Regulator: The establishment of a health regulator is suggested to oversee hospital pricing and service standards, ensuring fairness and consistency in medical treatment costs. This is vital in light of rising medical costs and inflation, which can increase by nearly 15% over three years.
- Tax Exemptions: Advocates are calling for broader tax exemptions on protection-oriented insurance products, including health and life insurance, to encourage personal protection and enhance financial security.
2. Support for MSMEs
The MSME sector is looking for significant support in the upcoming budget:
- Tax Adjustments: Simplified GST structures and reduced compliance costs are necessary to ease operational challenges faced by MSME retailers.
- Financial Assistance: Proposals include tax rebates for retailers using electronic payment systems and the establishment of a fund for low-interest loans to alleviate working capital constraints.
- Skill Development: There is an emphasis on funding skill development programs to enhance customer service and digital marketing capabilities among retail workers.
3. Sustainability in Retail
The retail industry is advocating for a focus on sustainability and employee development:
- Green Practices: Retailers are encouraged to adopt sustainable practices, such as energy-efficient systems and sustainable packaging, to align with industry procurement goals.
- Training Funds: Funding for skill development in areas like digital marketing is crucial for building a future-ready workforce capable of thriving in a competitive market.
4. Economic Slowdown Response
In light of a downward revision of GDP growth estimates, the Congress party is calling for urgent measures:
- Income Support: Increased minimum support prices (MSPs) and higher wages under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) are proposed to support the economically vulnerable.
- GST Overhaul: A major overhaul of the current GST system is demanded to simplify tax compliance and reduce burdens on taxpayers, particularly the middle class.
5. Real Estate and Green Hydrogen Initiatives
Key sectors are proposing measures to stimulate growth:
- Real Estate Sector: Proposals include raising the tax exemption limit on housing loans and reinstating the Credit Linked Subsidy Scheme (CLSS) for first-time homebuyers to enhance affordability and stimulate demand.
- Green Hydrogen Industry: Advocates are urging the government to introduce subsidies and tax incentives to make green hydrogen economically viable, along with a reworked Production Linked Incentive (PLI) scheme to encourage domestic production.
Important Details & Evidence about Electricity Generation Slowdown, Economic Survey Significance & Insurance Premium Tax Deductions
- Electricity Generation Slowdown: India’s electricity generation has seen its slowest growth since the COVID-19 pandemic, with a 5.8% annual increase, reflecting broader economic challenges.
- Economic Survey Significance: The Economic Survey, presented a day before the Union Budget, will provide critical insights into India’s economic performance, shaping the government’s financial strategy.
- Insurance Premium Tax Deductions: Proposed reforms to Section 80D of the Income Tax Act aim to increase tax deduction limits for health insurance premiums, which would enhance affordability for individuals and senior citizens.
Final Takeaways
The upcoming Union Budget 2025 is seen as a pivotal moment for various sectors in India, with stakeholders urging the government to implement reforms that will enhance economic resilience, improve healthcare access, and promote sustainability. The insurance sector’s calls for tax reductions and a dedicated health regulator highlight the pressing need for affordable health coverage. Similarly, support for MSMEs and initiatives in the retail sector underscore the importance of fostering innovation and sustainability. Overall, the budget is expected to address significant economic challenges while laying the groundwork for future growth and stability.
