Budget Expectations: Private Sector Wants Sops In The Budget For Expansion Of Quality Healthcare Services To Rural India

While the healthcare sector is one of the major growing sectors, there is an urgent need to increase the overall spends, particularly with respect to GDP. 

Although National Health Policy 2017 aims to increase healthcare spending to 2.5% of GDP by 2025, the current public health expenditure is only 1.3% of GDP. 

The private healthcare industry, which reaches to maximum people in urban India, wants the government to substantially increase the budget allocations for the sector. It also wants greater emphasis on areas like research, technology, affordable and accessible health services that need reconsideration in this year’s Union Budget.  

“The ambitious PMJAY scheme (Ayushman Bharat) holds a lot of promise and has the right intent, but requires much larger budgetary allocations, a new collaborative approach, and a conducive ecosystem to ensure viability and long-term stability”, says Rajit Mehta, Chief Executive Officer & Managing Director, Max Healthcare.  

Tax Breaks for Expansion of Private Healthcare 

Dr. Alok Roy, Chairman of Medica Superspecialty Hospital wants to see greater intent from the government to partner with the private healthcare system. “Keeping in mind the role played by the private healthcare sector, the government has to increase its intent to collaborate with the private sector,” says Roy.  The ambitious PMJAY scheme (Ayushman Bharat) holds a lot of promise and has the right intent, says Roy. “But I do hope the government authorities take the right partnership approach to more inclusive participation”, he adds. 

The private healthcare professionals also want a multi-pronged approach from the government and various tax breaks and fiscal incentives in order to expand the scope and reach of their coverage from primarily urban centres to Tier-II and Tier-III towns.  

Says Dr. Dharminder Nagar, MD, Paras Healthcare: “The government must offer major incentives and tax breaks to private healthcare organizations setting shop in non-urban areas. These incentives can include income tax breaks for the first few years of operations, help in procuring land, making medical equipment GST free for such hospitals and relaxation on service tax on hospital inputs.” Similarly, establishing a mechanism to offer fund support or subsidization in treatment cost to private hospitals in smaller towns and rural areas can go a long way in bridging the accessibility gap, says Dr. Nagar. 

Agrees Niira Radia of Nayati Healthcare. "The Government needs to incentivize the creation of tertiary care facilities in Tier 2 and 3 cities to boost the overall healthcare ecosystem of the country, just the way it was done in telecom and aviation,” Radia says. 

Tax Benefits for Diagnostics 

With most of the expenses on diagnostic tests are ‘out of pocket’ costs which the current taxation policies don’t cover, put a huge burden on the patients and limits their ability substantially. “We expect the budget to bring in incentives to enable rapid growth of the sector, in addition to helping more people to get preventive screening and testing done at an early stage,” says Zoya Brar, Founder & MD, CORE Diagnostics.