The Hindu Business Line : Booster dose for education, healthcare

The Budget is in line with the Government's focus of sustaining the current growth rate. There was a concern that while the overall GDP growth rate has been on target, the agriculture sector has been lagging. Thus higher allocations to rural development, particularly in the areas of irrigation as well as electrification are on expected lines.

The country can continue to sustain its rapid progress provided there is sufficient upgradation of infrastructure.

The Government's intention to allocate higher resources to roads and power is in the right direction. The focus on education and healthcare is vital as India is a knowledge economy, with a high share of aggregate income coming from knowledge-based service industries. This commitment to human development is an important step in sustaining the future growth of the economy.

The enhanced limit under Section 80(D) for health insurance of Rs 20,000 for senior citizens and Rs 15,000 for the general population is a welcome step in an environment where public healthcare spends are limited and the cost of medical care is skyrocketing.

The existing limit was created a decade ago and the Government has done the right thing by increasing it.

The new limit will motivate individuals to purchase a healthcare product in their younger years. However, hopefully the limit for senior citizens will be further enhanced in the years to come as the cost of healthcare is considerably higher for older people.

An incentive for long-term savings was expected in the form of special tax exemptions. Long-term savings, particularly towards pensions, are driven by tax exemptions world over, and it was hoped that this year the Government would introduce such a system in India. The current exemption under Section 80(C) clubs investments in various short- and long-term instruments. This encourages investors to opt for short-term saving instruments.

Also, separation of long-term savings from short-term savings would have been in line with government's thrust on infrastructure development, as the former are the right sources for financing infrastructure projects. Hopefully, the next Budget will provide special incentives for long-term savings.

(The author is CEO and MD, ICICI Prudential Life Insurance Company.)