Quote On Union Budget By Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance
Below The Quote On Union Budget By Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance
1) Overall view on Budget, 2025
o "The Union Budget 2025-26 demonstrates a balanced and strategic approach towards India's continued economic development. It effectively lays out a comprehensive roadmap for sustainable growth while maintaining fiscal prudence – a crucial balance needed at this juncture of our nation's progress.
o The government's enhanced focus on GYAN (Garib, Yuva, Annadata, and Nari Shakti) is particularly commendable, as it addresses core segments that form the backbone of our economy. The targeted interventions in agriculture, healthcare, investments, exports, and MSME, show promise in boosting rural income and creating new opportunities. These sector-specific initiatives are likely to contribute significantly to our country's overall economic resilience.
o We anticipate positive outcomes from the proposed income tax rates, particularly the advantage extended to middle class individuals earning up to ?12 lakhs. This reform reflects the government's commitment to supporting the middle class while maintaining a progressive tax structure.
o From a life insurance industry perspective, the increase in FDI limits in the insurance sector is positive in attracting fresh capital inflows that will enhance industry competitiveness, drive innovation, and expand insurance accessibility. As government initiatives boost income levels across Bharat, we expect to see increased financial awareness and capability among citizens to invest in their long-term financial security. This aligns perfectly with our mission at Bajaj Allianz Life to extend life protection to every Indian household in alignment with Government’s vision of insurance for all by 2047.
o The government's strong push for rural development, including increased investment in agri-infrastructure, digital connectivity, and financial empowerment, will create a more conducive environment for financial security solutions. As rural incomes rise and financial awareness deepens, the demand for life insurance is expected to grow, ensuring better protection for families across Bharat. At Bajaj Allianz Life, we remain committed to leveraging these enabling conditions to expand insurance accessibility and provide comprehensive financial protection to individuals across the country."
2) Impact of new tax regime on business
o "Over the years, customers have become more financially aware and no longer view life insurance solely as a tax-saving tool. They recognize its value as a powerful and versatile financial instrument for long-term security. With the industry continuously innovating and reinventing itself with simple and relevant products, life insurance is naturally becoming an integral part of their financial portfolios.
o The regulator has also introduced a slew of reforms to ensure there’s increased awareness, accessibility and affordability. They are all directed towards customers getting optimum value from life insurance products. Therefore, customers are increasingly looking beyond just tax benefits when purchasing life insurance and this should not impact the life insurance sector.”
3) Change in definition of capital assets with respect to ULIPs:
o “The proposed clarification on ULIP taxation is a welcome step towards greater transparency and consistency in tax treatment. ULIPs where aggregate annual premium is less than ?2.5 lakhs and do not qualify for exemption under Section 10(10D) are now proposed to be defined as capital assets and taxed as capital gains instead of applicable slab tax rates.
o This shift from taxation under 'income from other sources' to capital gains brings more clarity and fairness, reinforcing ULIPs as a compelling long-term investment option. We view this as a progressive move that will enhance customer confidence and encourage disciplined financial planning. At Bajaj Allianz Life, we remain committed to offering innovative insurance and investment solutions that align with evolving regulations and policyholder needs.”
4) Change in FDI Limits:
o "The Union Budget has clearly focused on driving consumption led growth and foster inclusive development. A key highlight is the increase in the FDI limit in the insurance sector from 74% to 100%, a move set to bring in fresh capital and bolster the industry's financial strength. The decision reflects the government’s continued commitment to making India a prime investment hub for stable, long-term capital.
o Greater foreign participation, will accelerate the adoption of global best practices, introduce innovative products, and elevate customer service standards. Additionally, the mandate to invest premiums within India ensures that these funds contribute to domestic economic growth and infrastructure development.
o The next five years present a significant and an exciting opportunity to propel the industry forward onto greater heights.
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