On March 10, 2021, The Union Cabinet headed by Prime Minister Narendra Modi gave its approval for
- Creation of Pradhan Mantri Swasthya Suraksha Nidhi as a single non-lapsable reserve fund for health from Health & Education Cess.
- Amendment for Insurance Act, 1938 to increase Foreign Direct Investment (FDI) limit in the sector to 74% from 49%.
Creation of Pradhan Mantri Swasthya Suraksha Nidhi (PMSSN)
PMSSN was approved as a single non-lapsable reserve fund for a share of Health from the proceeds of Health & Education Cess levied under Section 136-b of Finance Act, 2007.
- PMSSN will be administered & maintained by the Ministry of Health &Family Welfare (MoHFW).
i.It will serve as a Non-Lapsable reserve fund for Health in Public Account.
A non-lapsable fund would mean the unspent amount from capital budget of the ministry will not lapse, and will continue in the next fiscal.
ii.Proceeds of the share of health in Health & Education cess will be credited into PMSSN.
iii. The Accruals from the proceeds will be utilized for implementing the schemes of the Ministry of Health & Family Welfare namely
- Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY)
- Ayushman Bharat – Health and Wellness Centres (AB-HWCs)
- National Health Mission
- Pradhan Mantri Swasthya Suraksha Yojana (PMSSY)
- Emergency & disaster preparedness & responses during health emergencies
- Future programme/scheme whose target will be to achieve SDGs (Sustainable Development Goals) & other targets set out in the National Health Policy (NHP) 2017.
- In any Financial Year, the expenditure on such schemes of MoHFW will be initially drawn from PMSSN & thereafter from Gross Budgetary Support (GBS).
- Increased access to universal & affordable health care through the availability of designated funds.
- It will also ensure that the amount allocated does not lapse at the end of each Financial Year.
Health is vital for improved developmental outcomes,
- Health & Nutrition have a direct impact on productivity & income
- Reduces losses due to premature death
- Prolonged disability and early retirement.
- One extra year of population life expectancy raises GDP per capita by 4%.
Education Cess to Health & Education Cess
During the budget speech of 2018, the then Union Finance Minister, Arun Jaitley announced the replacement of the existing 3% Education Cess by 4% Health & Education Cess.
Cabinet approves Amendment to hike FDI to 74%
The cabinet approved the Amendment for Insurance Act, 1938 to increase FDI in the Insurance Sector to 74% from 49%.
- The increase in FDI is expected to improve capital availability & boost competition in the sector.
- It was announced by the Union Finance Minister, Nirmala Sitharaman in the Union Budget 2021-22.
Under the new structure,
- The majority of directors on board & key management persons would be resident Indians.
- At least, 50% of directors being independent directors & specified percentage of profits will be retained as a general reserve.
Penetration of Insurance in India
- At present, the Life Insurance premium as a percentage of GDP is 3.6% in India which is less than the global average of 7.13%.
- In the case of General Insurance, it is 0.94% of India’s GDP, the world average is 2.88%.
India has already allowed 100% FDI in Insurance intermediary services which include insurance brokers, reinsurance brokers, insurance consultants, corporate agents, third party administrators, surveyors & loss assessors.
Recent Related News:
i.On December 16, 2020, the Union Cabinet chaired by Prime Minister (PM) Narendra Modi has approved the proposals detailed by Union Minister Prakash Keshav Javadekar, Ministry of Information and Broadcasting (I&B), Ministry of Heavy Industries & Public Enterprises (MoHI&PE), and Ministry of Environment, Forest and Climate Change (MoEFCC).
ii.November 26, 2020, The Union Cabinet chaired by Prime Minister (PM) Narendra Modi has approved the following approvals on November 25, 2020, which were detailed by Union Minister Prakash Keshav Javadekar during a press conference.
- A small executive body that acts as the supreme decision-making body in India.
- Only the Prime Minister & Ministers of the rank of Cabinet Minister are members of the Union Cabinet following Article 75 of the Indian Constitution.
- The total number of ministers in the Union Cabinet must not exceed 15% of the total number of members of Lok Sabha.