India progresses on universal health coverage

Biggest challenge is to cover the ‘missing middle’ which is the population not covered by the Government’s national health insurance schemes

By H. P. Ranina

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India has set up a committee to draw up a roadmap for universal health insurance coverage. Picture for illustrative purposes only. - File photo
India has set up a committee to draw up a roadmap for universal health insurance coverage. Picture for illustrative purposes only. - File photo

Published: Sat 12 Nov 2022, 2:00 PM

Question: The Indian Government has been promising a universal health insurance plan which would cover the entire Indian population. Have any concrete measures been taken to put it into effect?

A Health Insurance Consultative Committee has been recently constituted by the Insurance Regulatory & Development Authority of India (IRDAI). This committee has been directed to draw up a roadmap for universal health insurance coverage. The committee will periodically visit the various elements in the health insurance value chain to achieve the goal of universalisation of health insurance. According to health insurance industry officials, the biggest challenge is to cover the ‘missing middle’ which is the population not covered by the Government’s national health insurance schemes. This ‘missing middle’ covers millions of self-employed persons and gig workers who are not covered under any employers’ health insurance plan. Further, in order to attract capital from foreign reinsurance companies, IRDAI has relaxed and liberalized the guidelines for the repatriation of excess capital brought into India by foreign reinsurers.


Question: Most countries have a problem of national debt going up substantially every fiscal year. How is India proposing to tackle this problem so that future generations are left with a lighter burden for repayment of debt?

The Indian Government is taking positive measures to control the growth of national debt and bring it down over the next few years. According to the chief economic adviser, government debt will be reduced by monetising public assets owned by the government. The receipts therefrom will be used to repay the national debt. According to the adviser, it will provide the best stimulus for the economy. In the past, the government wanted to use the asset monetisation receipts for reinvesting the amount in the companies or agencies whose assets were sold. It is now felt that the sale proceeds of public assets should flow into the Consolidated Fund of India in order to reduce the fiscal deficit. This is a clear indication that the Government is moving in a different direction with the primary object of keeping in check the debt-to-GDP ratio.


Question: Shares on the American stock markets have maintained their price levels despite the US Federal Reserve Bank increasing interest rates. However, Indian stocks and shares have been showing a marked decline when the US Fed announces a hike in interest rates. Is there any rationale for this?

ANSWER: Foreign portfolio investors have been selling securities in India and other Asian countries and moved the funds to the US to take advantage of higher interest rates. This selling pressure has caused a fall in the price of Indian and Asian shares. The fall in the price of recently issued IPO shares has also weakened the sentiment. Share prices on American stock exchanges have stabilised in recent days primarily because the US Federal Reserve Bank has acknowledged that it has already done a lot to tackle inflation and it may be prudent to slow down the pace of future increases in rates. It is expected that in view of the lag effect the increase in interest rates announced in the past four months will help to control inflation in the US. This view is gathering strength and therefore prices of US securities have stabilised in the hope that inflation will be kept in check and, therefore, any future increase in interest rates will be benign. Positive figures of recent growth in employment in America have also boosted the investment sentiment.

H. P. Ranina is a practicing lawyer, specializing in tax and exchange management laws of India.



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