New Delhi: In order to ensure social security and promote public health, the government today proposed a slew of schemes like Pradhan Mantri Suraksha Bima Yojna, ATAL Pension Yojana and tax incentives for National Pension System.
"A large proportion of India's population is without insurance of any kind - health, accidental or life. Worryingly, as our young population ages, it is also going to be pension-less," Finance Minister Arun Jaitley said while presenting Budget for 2015-16 in the Lok Sabha.
"Encouraged by the success of the Pradhan Mantri Jan Dhan Yojana, I propose to work towards creating a universal social security system for all Indians, specially the poor and the under-privileged," he said.
The soon-to-be-launched Pradhan Mantri Suraksha Bima Yojna will cover accidental death risk of Rs 2 lakh for a premium of just Rs 12 per year, he said.
"Similarly, we will also launch the ATAL Pension Yojana, which will provide a defined pension, depending on the contribution, and its period. To encourage people to join this scheme, the Government will contribute 50 percent of the beneficiaries' premium limited to Rs 1,000 each year, for five years, in the new accounts opened before December 31, 2015," he said.
"The third Social Security Scheme that I wish to announce is the Pradhan Mantri Jeevan Jyoti Bima Yojana which covers both natural and accidental death risk of Rs 2 lakhs," he said.
The premium will be Rs 330 per year, or less than one rupee per day, for the age group 18-50, he said.
It is proposed to increase the limit of deduction under 80CCD of the Income-tax Act on account of contribution by the employee to National Pension Scheme (NPS) from Rs 1 lakh to Rs 1.50 lakh, he said.
It is also proposed to provide a deduction of up to Rs 50,000 over and above the limit of Rs 1.50 lakh in respect of contributions made to NPS, he added.
The Finance Minister said there are unclaimed deposits of about Rs 3,000 crore in the PPF, and approximately Rs 6,000 crore in the EPF corpus.
"I have proposed the creation of a Senior Citizen Welfare Fund, in the Finance Bill, for appropriation of these amounts to a corpus which will be used to subsidize the premiums of vulnerable groups such as old age pensioners, BPL card- holders, small and marginal farmers and others. A detailed scheme would be issued in March," he said.
Jaitley said special regard needs to be paid to the population of senior citizens in the country which is now approximately 10.5 crore, out of which over 1 crore are above the age of 80 years.
"70 percent live in rural areas and a large number are in the BPL category. A sizeable percentage of them also suffer from age related disabilities. Ours is a society that venerates its elders. I, therefore, propose that a new scheme for providing Physical Aids and Assisted Living Devices for senior citizens, living below the poverty line," he said.
"In sum, these social security schemes reflect our commitment to utilise the Jan Dhan platform, to ensure that no Indian citizen will have to worry about illness, accidents, or penury in old age. Being sensitive to the needs of the poor, under-privileged and the disadvantaged, my Government also remains committed to the ongoing welfare schemes for the SCs, STs and Women," he said.
Despite serious constraints, the budget has made allocations of Rs 30,851 crore for Scheduled Caste, Rs 19,980 crore for Scheduled Tribes and Rs 79,258 crore for women.
In an employee-friendly move, the government made provident fund contribution optional for workers getting salary below a threshold.
However, the employer will continue to contribute his share of the PF irrespective of the worker opting not to pay his contribution.
The Finance Minister said an integrated education and livelihood scheme called 'NaiManzil' will be launched this year to enable Minority Youth who do not have a formal school-leaving certificate to obtain one and find better employment.
"Further, to show-case civilization and culture of the Parsis, the Government will support, in 2015-16, an exhibition, 'The Everlasting Flame'. The allocation for the Ministry of Minority Affairs is being protected. The budget estimate for the year 2015-16 is Rs 3,738 crore," he said.
On the Budget proposals, Max Bupa Chief Operations Officer Somesh Chandra said: "Increasing the tax deduction in health insurance premium from Rs 15,000 to Rs 25,000 and up to Rs 30,000 for senior citizens will improve affordability, accessibility and awareness of health insurance."
He said accident insurance for rural and BPL population with annual premium of Rs 12 shows the government's focus on affordable healthcare.
"This will boost health insurance penetration, which is currently under 5 percent and mostly restricted to the urban areas," he added.
Tata AIG General Insurance Chief Executive K K Mishra said: "The increase in exemption from income tax on investment in health insurance by an individual will allow consumers to avoid higher sum assured and which in turn will benefit the health insurance industry as a whole."
However, he said the industry wanted a similar discount on the home insurance front too, which didn't happen.
HDFC Life Managing Director and CEO Amitabh Chaudhry said: "We believe more could have been done for encouraging domestic savings in financial assets, especially longer-term savings such as insurance."
PNB MetLife Managing Director and CEO Arun Chugh said: "We welcome the proposal to increase the tax benefits for health insurance. Currently, over 78-80 percent of health care expenses are funded by Indians out of their own pocket and this move will encourage people to increase their coverage keeping in the mind the rising cost of healthcare."
From the social security perspective, Chugh said it is a positive move to increase tax benefits by Rs 50,000 for people investing in pension products.
"In India, there are 80 crore people below 35 years of age who need to start planning quickly for their retirement. And 71 percent of them are concerned about running out of money in their retirement years.
"Being a young country, there is a huge potential for pension plans. We hope that the Government considers passing on these benefits to people investing in private pension funds beyond National Pension System (NPS)," he said.
New India Assurance Chairman and Managing Director G Srinivasan said the new personal accident cover of Rs 2 lakh to be provided to all Jan Dhan bank account holders by payment of premium of Rs 12 per annum will give a push to the personal accident insurance policy.
Religare Health Insurance Company Managing Director and CEO Anuj Gualti opined that the enhanced tax exemption on health insurance premiums will encourage people to invest appropriately in health insurance.
Cigna TTK Health Insurance Managing Director and CEO Sandeep Patel said given the high inflation in medical treatments in India, the Budget is a step in right direction.
