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The central government is set to extend insurance coverage to 25,000 gram panchayats as part of a targeted push to deepen insurance market penetration in rural areas. Finance Minister Nirmala Sitharaman, while speaking in the Lok Sabha, emphasized that the gram panchayat will now serve as the focal unit of measurement for rural obligations and coverage.
"In December 2025, we brought in a Bill whereby we had increased the FDI coverage to 100 per cent, primarily aiming to bring greater penetration and deepen the insurance market," Sitharaman told the House. "In that connection, I would like to inform through you, sir, that 25,000 gram panchayats will be covered this time, with gram panchayat being at the focal centre and looking at coverage of insurance in and around that area," the Union Minister said. She explained that the shift follows the notification of the Insurance Regulatory Development Authority Rules for the rural social sector and motor third-party obligations in 2024. "I would like to highlight the fact that the IRDAI, the insurance regulator, has notified Insurance Regulatory Development Authority Rules for the rural social sector and motor third-party obligations in 2024, whereby gram panchayat level inclusion happens for insurance. So, the remotest areas will be covered by that." Reiterating the administration's focus on the sector, the Minister noted, "Health insurance is a priority for this government." She highlighted that legislative measures have been taken to attract global investment and deepen market reach. Sitharaman pointed out that the government is actively bridging the low overall insurance penetration gap. She noted that "health insurance is now a clear priority with GST exemption on individual premiums, expansion of coverage and strong regulatory push driving the momentum." The sector has already shown growth, scaling to Rs 1.17 lakh crore in FY25 and covering 58 crore lives through a mix of public, private, and standalone insurers. The Finance Minister also stressed the importance of affordability in achieving universal inclusion. She cited government-backed initiatives like the PM Jeevan Jyoti Bima Yojana, which offers "meaningful protection at just Rs 436/year for Rs 2 lakh cover, ensuring even the most vulnerable are not left behind." "With 26.79 crore enrollments and proven responsiveness during COVID, India is steadily building a more inclusive, accessible, and resilient health insurance ecosystem," Sitharaman stated. (ANI)
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