BudgetSpeak #16: Roopam Asthana: We expect a Budget that will overall business confidence

09 Jul,2014

By Roopam Asthana

 

This Budget has to be one that generates hope. The primary objective must be boosting of business confidence across different segments of services, manufacturing and agricultural sectors. Investment cycles in most industries are long and commitments of investment require a positive outlook over at least a medium term. This Budget must spur this positive outlook so that investment cycles in accretion of capacities and boost in production and new infrastructure projects can commence post haste. Only this will help us in generating employment and creating future accretive revenues for the government to spend on healthcare, education and food security. I would also urge that the focus of employment generation should be on Tier 3 cities and smaller towns so that growth in more equitable across the country.

 

Specifically for General Insurance Industry

1. I would like to see some more tax incentives for spends on protection of personal assets like homes and on health insurance through enlargement of scope of Sec 80 D.

 

2. To improve health coverage, corporates and SMEs need to be pushed to provide health insurance coverage for a stipulated minimum amount on a mandatory basis to all their employees. This should be combined with an effort to set standard costs for pre-defined medical procedures at hospitals where this insurance cover can be availed.

 

3. On matters of taxation, the government could consider exempting all reinsurance transactions from Service Tax, simplifying Service tax to the first point of premium collection that is, from the original insured. Claims Provisions made by insurance as per IRDA regulations are in a number of cases being disallowed and added back to income by Tax Assessment officials – this issue needs to be set straight and such provisions that strengthen the balance sheets of insurance companies should be allowed.

 

4. On the front of the Motor Vehicles Act, the following changes need to be enacted immediately and we would like to see a mention of this in the forward-looking statements of the Budget: For Motor TP Liability insurance portfolio to break even, following legislative amendments to MV Act are crucial:

– Limit  / Cap the TP Liability under MV Act;

– Limitation as regards time limit for filing the claims

– Limitation as regards Jurisdiction to file claims

– Defense available to Insurance companies to be made absolute

 

We expect a Budget that is realistic and has immediate short-term measures built in that will spur the overall business confidence in India.

 

Roopam Asthana is C E O & Whole Time Director, Liberty Videocon General Insurance Company Ltd

 

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