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As the Union Budget 2024-25 approaches, there is an urgent need for government intervention on tax incentives, rationalizing GST, reducing medtech imports, and increasing healthcare allocation, says Dr. Vivek Desai, founder & managing director of HOSMAC emphasizing the need for critical reforms in the healthcare sector incentives and increasing healthcare allocation.
HOSMAC is Asia's premier hospital planning, designing, and management consultancy. With a robust portfolio of services, including strategic planning, architectural design, and healthcare management consulting, HOSMAC has been instrumental in shaping the healthcare landscape across Asia. The company’s expertise spans over two decades, making them a trusted partner for numerous healthcare institutions seeking to enhance operational efficiency and patient care standards.
Dr. Desai underscores the importance of tax incentives for healthcare infrastructure development. He suggests extending the tax relief period for NABH-accredited hospitals in smaller towns from five to ten years under section 80IB. "This extension will attract investments and boost infrastructure in Tier-II and III towns," says Dr. Desai.
He also calls for the rationalization of GST on hospital construction and medical technology procurement to significantly reduce capital expenditure, thereby alleviating the financial burden on patients.
Dr. Desai calls for an increase in the overall allocation to healthcare to 2.5% of the GDP, as previously assured. "The current expenditure of 1.8% is insufficient to meet the healthcare needs of our nation. A holistic budget addressing these concerns will undoubtedly fortify India's healthcare infrastructure, paving the way for a healthier and economically robust nation," he notes.
Budget must prioritize affordable and accessible healthcare. Standardizing private healthcare costs can ease the financial burden on lower and middle-income families, comprising 31% of our population, ensuring equitable access to medical care. Additionally, including the middle class in schemes like Ayushman Bharat and introducing co-payment strategies can ensure they are adequately insured and can afford quality healthcare.
Emphasizing the need for self-reliance, Dr. Desai stresses on the importance of reducing reliance on medical technology imports. "Increasing investment under the production-linked incentive (PLI) scheme for manufacturing medical devices will meet the surging demand and enhance our self-reliance," he stated.
He further states that fostering Public-Private Partnerships (PPPs) can effectively utilize existing public infrastructure in rural areas. Establishing a special-purpose vehicle (SPV) for PPPs can attract private sector participation on a win-win basis.
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