Ishika Kumar, Pune
In a display of unity, the I.N.D.I.A. bloc staged a significant protest on 6th August 2024, demanding the rollback of the 18% Goods and Services Tax (GST) on life and health insurance premiums.
This display happened on the steps leading to the Makar Dwar of Parliament. Notable members from various opposition parties were present, such as Trinamool Congress (TMC), Congress, Aam Aadmi Party (AAP), Nationalist Congress Party (NCP) etc. The opposition’s primary argument is that the GST on insurance premiums adds an unnecessary financial burden on the middle class, aggravating their already strained economic conditions. The MPs sought to voice what they considered as the government’s insensitivity to the financial struggles of ordinary citizens. They carried placards in seven languages and chanted slogans like “Tax terrorism”.
Leader of the Opposition, Rahul Gandhi remarked why the protests are important, by posting on social media platform ‘X’, “The Modi government even collected ₹24,000 crore from millions of common Indians who pay health insurance premiums every year by saving every penny to ensure that they do not have to bow down to anyone in case of a ‘health crisis’ in life.” Further accusing the government of exploiting every disaster as a “tax opportunity,” reflecting the “insensitive thinking” of the BJP administration.
Senior Congress leader Shashi Tharoor also lent his voice by conveying that imposing GST on essential health insurance is unjustifiable. He pointed out that Indian citizens already face the highest out-of-pocket expenses for health crises globally. This sentiment was also backed by West Bengal’s Chief Minister Mamata Banerjee, who has written to Finance Minister Nirmala Sitharaman urging a reconsideration of the GST imposition.
The protest also received backing from within the BJP-led NDA government. Union Minister Nitin Gadkari’s letter to Sitharaman urged the withdrawal of GST on insurance premiums, arguing that such taxation amounts to taxing life’s uncertainties and restraining the industry’s growth.
In a written response to a query by TMC’s Mala Roy, Minister of State for Finance Pankaj Chaudhary clarified that certain insurance schemes catering to poorer sections and differently-abled individuals are exempt from the 18% GST. These include the Rashtriya Swasthya Bima Yojana (RSBY), Universal Health Insurance Scheme, Jan Arogya Bima Policy, and Niramaya Health Insurance Scheme. However, the financial impact of the GST on insurance premiums has been significant. The GST collection from health insurance premiums in FY24 amounted to ₹8262.94 crore, a substantial increase from ₹5354.28 crore in FY22. Similarly, collections from life insurance premiums rose from ₹825.95 crore in FY22 to ₹1484.36 crore in FY24.
Following the protests, Lok Sabha Speaker Om Birla warned the members against holding demonstrations on Parliament’s steps, urging them to respect the consensus and not block the entrance. The INDIA bloc’s protest against the 18% GST on life and health insurance premiums is the deep-seated discontent with current tax policies, which levy economic pressures on the middle class.