Ahead of the Union Government Budget 2025, the State Bank of India (SBI) has also released a report demanding major overhauls to the insurance and healthcare sectors. The report focuses on key challenges, including low insurance penetration and growing healthcare demands, many of which highlight what they can do about it.

Boosting Insurance Penetration
One of the primary suggestions is to exempt GST and any other taxes not included on term and health insurance premiums. In this step, insurance policies would be more affordable, and adoption would increase for individuals and families. The report also recommends the inclusion of life and health insurance premiums as a separate tax deduction, like in the case of the National Pension Scheme (NPS). Both old and new regimes have recommended a deduction of ₹25,000 for individuals and ₹50,000 for the family, out of which additional incentives are being provided so that policyholders can increase their investments.

Revitalizing Pension Schemes
The report suggests bringing together various government-backed pension schemes like APY, PM-SYM, PM-KMY and NPS for Traders under a single umbrella. This integration would enable operational efficiency and lead to the provision of complete social security coverage of beneficiaries.

Healthcare Reforms
The report further ascertains the need to raise healthcare expenditure. It recommends increasing healthcare spending to 5 percent not only above the National Health Policy 2017’s target of 2.5 percent of the GDP but also much higher than the present level of 1.6 percent suggested by the United Progressive Alliance at the 8th advanced meeting of the National Health Policy Committee in April 2005, which declared a target of 5 percent of the GDP by 2012. Such an enhanced allocation in the budget would be essential for meeting the healthcare needs of a growing and ageing India.

Such recommendations, undertaken, could not only enhance the structure of social security systems but also make health care and insurance more accessible to a larger group, something that the country is struggling with.

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