The Union Budget 2023 is here and Finance Minister of India, Mrs. Nirmala Sitharaman has made some big announcement. This is an important Budget as it is the last full budget before the Lok Sabha elections scheduled for 2024. We, at Surety 007, mention the key takeaways from this Union budget for the Insurance and Surety Bond sector.
The key takeaways for Union Budget session 2023 for Insurance and Surety Bonds:
- PAN as common Digital identifier: Linking PAN with Insurance policy will be compulsory for all policy holders.
- Collateral Free Credit Guarantee: INR 2 Trillion (or 2 Lac crores) worth of Collateral Free Credit Guarantee announced, to made possible through Surety Bonds, Payment Guarantee or Advance Payment Guarantee Surety Bonds, by Insurance companies in India. Infusion of INR 9000 crores in Credit Guarantee Scheme for MSME’s.
- Insurance Cover for 44.6 core person through PMSBY & PMJJY: PMSBY (Pradhan Mantri Suraksha Bima Yojna) and PMJJY (Pradhan Mantri Jivan Jyoti Bima Yojna) to provide Accident Insurance and Life Insurance respectively.
- INR 20 Trillion (or 20 Lac Crore) Agricultural Credit Targeted: This will be a strong push for PMBFY (Pradhan Mantri Bima Fasal Yojna)
- Income Tax exemption on Sum received under Life Insurance: Under section 10D. The same, however, does not apply to Keyman Insurance.
- Allocation of INR 2.7 Trillion (2.7 Lac crores) to MORTH: Infrastructure push as MORTH (Ministry of Road Transport & Highways) is given the second highest budget of INR 2.7 Trillion for infrastructure development. Gives a strong push for Surety Bond Insurance market in construction sector.
PS: No personal income tax up to INR 7 Lacs with INR 50,000 additional standard deduction.
Overall, seems like a well balanced budget with some good announcements and relief for the Middle class of India. This may be termed as a People’s Budget.
WORDS OF CEO: PRANJAL ANEJA
Words of our CEO, Pranjal Aneja on the Union Budget 2023 delivered by Mrs. Nirmala Sitharaman, Hon. Minister of Finance.
“There is a strong push for infrastructure development with second and third highest budget allocation to Ministry of Road Transport & Highways and Ministry of Railways. Infrastructure push will lead to strong growth in the corporate insurance sector and more specifically on Surety Bonds and Engineering Risk Insurance. This is clearly a PEOPLE’s budget. Overall, very positive indicators and measures announced in the budget. Financial regulators will have to standardize regulations and organizations like IRDAI will possibly need to pull up their socks.”