By: Subrata Mondal (Managing Director & CEO, IFFCO-TOKIO General Insurance Company Limited)
We approach this year’s Union Budget 2026 with optimism, particularly following the GST rationalisation on health insurance announced recently, which has provided much-needed relief to individual policyholders and is expected to improve insurance penetration by making health cover more affordable and accessible. Lower taxation on essential protection products is a strong step toward building a more resilient and insured India.
However, there is still a strong case for enhancing the income-tax deduction limit under Section 80D of the Income-Tax Act. Currently, the deduction is capped at ₹25,000 for individuals and families below 60 years of age and ₹50,000 for senior citizens. These limits were set several years ago and no longer adequately reflect rising medical inflation and the growing need for higher health cover. Doubling the deduction would encourage households to opt for adequate protection rather than minimal coverage and support long-term financial security.
We also believe the Budget presents an important opportunity to strengthen India’s crop and climate risk insurance framework. Higher allocation to the Pradhan Mantri Fasal Bima Yojana (PMFBY), along with expanded coverage for climate-linked risks such as floods, heatwaves, and cyclones, would provide critical protection to farmers amid increasing climate volatility.
Additionally, promoting disaster and catastrophe insurance pools can help spread systemic risk, improve claim settlement capacity during extreme events, and enhance the overall resilience of the insurance ecosystem.
Such measures would not only protect livelihoods but also reinforce the role of insurance as a key pillar in India’s economic and social stability.
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