Great Budget Expectations From Affordable Housing to Digital Healthcare

The countdown for the Union Budget 2020 has begun. Whether it is a taxpayer, corporate or a tax expert, everyone has got some expectations from the Finance Minister Nirmala Sitharaman. 

Here are few industry captains sharing their expectations and recommendations from the Union Budget 2020-21.

Honeyy Katiyal, Founder of Investors Clinic

“The limit of 45 lacs to avail reduced GST rates of 1% for affordable housing should be increased to INR 65-75 lacs within the prescribed 60 square metres of carpet area to avail GST benefit exemption. The demand for luxuries under the affordable housing segment is increasing with new age millionaires. Interest rates on home loans should be reduced to 7% for the affordable housing segment which is going to be the flavour of the year 2020, due to demand from end users and millennial. Home loan interest deduction should be increased to INR 5 lacs to improve sales.  More liquidity should be provided to the masses through raising personal tax exemption limits to improve overall sentiments.”

Ritkrit Jain, Founder of Prodi

Commercial real estate sector have shown an evident growth and booming activity as compared to the residential market. On the commercial real estate front, clarity is needed about the treatment of goods and services tax (GST) on projects which are being strata sold versus those being developed for leasing. When the properties are not sold but developed for leasing, GST at 18 percent is applicable, basis this theory that this is a service. Clearly, this needs to be addressed and should be removed. This creates an unnecessary burden and pushes up the cost of construction. It also increases the challenges of cash flows available, especially when there is a liquidity crunch in the sector at the present. 

Manish Chhabra, CEO & Founder, Shifa Care

While sharing expectations and recommendations on behalf of the digital healthcare players, Manish Chhabra, CEO & Founder, Shifa Care says, “The Finance Minister must look at allocating at least 25% increase in last year’s budget of INR 62, 398 crores for the healthcare sector, making it more affordable for the lower strata. Policies and initiatives like moving towards reimbursed market or co pay market from the current out of the pocket market must be mulled over. GST on health tech /healthcare should be exempted; this will encourage more innovations in the healthcare sector. The Govt must look at introducing policy focusing on the use of Biosimilars for all chronic diseases like inflammation, pain, heart disease, diabetes, cancer, high blood pressure, etc. This will require an investment of USD 500 million initially for international level modular biosimilars’ manufacturing. Biosimilars adoption in developed countries like Australia has saved Govt’s healthcare burden by 50-70% on Biologics spending”.

Sakshee Katiyal, CEO of Home&Soul

The government has taken immensely important measures for the real estate industry. Despite that customers and positive sentiments are still missing in the sector. Reforms only help if there is positive environment in the economy. For the same the government needs to implement benefit to the salaried class through increase in income tax rebate. The another important incentive which government can offer is rebate on home loans for first time home buyers by reducing interest rates to 6-7%. The government should look into increasing the rebate on interest on home loan to 5 lakhs. The government should also fast track the implementation of INR 25,000 crore of financial help extended for completion of the stuck housing projects to improve sentiment.

Nivesh Khandelwal CEO and Founder, CareCover

Dwelling on the health insurance and expenditure on health, including both public and Out of Pocket Expenditure (OOP) vis a vis the medical financing industry’s expectations, Nivesh Khandelwal CEO and Founder, CareCover says, “While public expenditure on healthcare has increased in absolute terms from INR 72,000 crores to INR 2.13 lakh crore, it has still not kept pace with WHO standards for public health expenditure as a percentage of GDP. The government should aim to increase the expenditure as % of GDP by 0.25 basis points every year. Notably, the hospitalisation expenses are lower in certain states like Delhi and Karnataka as compared to other states. The Government needs to set up a task force to assess how to bring down the cost of healthcare without penalising service providers for the same. Successful schemes like Delhi Arogya Kosh could be implemented across other states too. 

Unfortunately, in India, 70% of the total healthcare expenditure is out of pocket expenditure and 5 crore people are pushed below the poverty line due to the burden of healthcare expenditure. This is something that the policymakers must ponder over and seek collaboration from players working in the domain. One of the solutions that we are providing is towards converting the OPP into easy EMIs with zero % rate of interest for 12 months.”

Shiva Vig, Group CEO, BioD Energy (India) Pvt Ltd

While sharing his expectations and recommendations on behalf of the oil and energy sector, Shiva Vig, Group CEO, BioD Energy (India) Pvt Ltd. says, “Looking at the grim situation of smog and hazardous air pollution around Diwali festival in northern India and other parts of the country, identifying and implementing new and sustainable fuels is need of the hour. Usage of biodiesel not only in automobiles, residential generators but also in industrial use, typically brings a reduction in greenhouse gases from 75-90 per cent everywhere relative to fossil diesel. Thus, dedicated funds must be allocated for developing the infrastructure for such biodiesel producing units. And, there should be zero duty on the import of the machinery for putting up a biodiesel manufacturing plant.”

Divyanshu Tripathi, Co-founder and CEO, Easypolicy

According to latest Insurance Regulatory Development Authority of India (IRDAI) annual report India’s life insurance penetration in 2018 is 2.74 per cent and non-life is 0.97 per cent and overall industry is 3.70 per cent.

The online players and insurance companies will and are playing their part in coming up with products, increasing awareness and making the buying and servicing experience better. But, to have a substantial impact on bridging the protection gap, a lot is expected from Government to incentivize getting protected. Dedicated government focus on bringing more people under the ambit of life, health and general insurance is the need of the hour and industry is expecting the government to look in that direction.

There could be some measures taken to encourage first time buyers to go for insurance. Women especially could be incentivized. In 2018-19, women bought 103 lakh life insurance policies and contributed Rs 36,525 crore of premiums (individual life insurance new business). Introducing separate deduction for first time life insurance buyers and an additional capping for someone purchasing a pure protection (term) plan will put life insurance on fast track. Relaxation of section 10(10)(D), where minimum sum assured is required to be 10 times of annual premium would be a desirable move. Lowering rate of GST will be beneficial for both policyholders and companies. The removal of GST will reduce the cost of a policy, making insurance affordable for individual policyholders. Besides, if we look at the private banking sector in India, it is subject to a 74% FDI cap. This could be extended to the rest of financial sector bringing insurance under its ambit. This would open up new avenues for insurance companies to infuse more capital and hence, improve penetration.