Healthcare providers want 10-yr tax holiday on new hospitals

Ahead of the Budget, healthcare service providers including Apollo and Fortis, have sought incentive packages, including ten year tax holiday on hospital projects, saying it will encourage investments in the sector.
Besides, the hospital chains said that in order to make healthcare affordable and accessible to all, the government should work with private third party insurance players to reduce out of pocket spending by citizens.
"Government support for this sector is crucial... To encourage investments in medical and hospital infrastructure, clear guidelines, giving substance to the infrastructure status accorded to the sector need to be spelt out," Fortis Healthcare Executive Chairman Malvinder Mohan Singh told PTI.

He further said, "An incentive package with direct tax benefits for capital expenditure and a ten year tax holiday for hospital projects and exemption from GST could galvanise significant investment in the expansion and creation of healthcare infrastructure".
Stressing on the role of government to make healthcare affordable, Apollo Hospitals Enterprise Managing Director Suneeta Reddy said: "In order to ensure affordable and accessible healthcare to all, the government should work with private third party insurance players to reduce out of pocket spending by citizens."
In an ideal situation, healthcare spending should reach 6 per cent of GDP with considerable contribution from the government and private players, where out of pocket spending by individuals is less than 30 per cent, she added.

Reddy said healthcare expenditure by the government is currently at 1.2 per cent of the GDP whereas countries like China and the US spend 3 per cent and 8.3 per cent, respectively.

Singh said steps to expand access to healthcare by increasing health insurance penetration need to be taken up.
Emphasising that putting tariff barriers will not help in
manufacturing of medical devices in India, Philips India Vice-Chairman and MD V Raja said: "The healthcare industry in general along with Philips feels creating tariff barriers will not help indigenous manufacturing."
Instead, it would lead to a hike in prices of medical devices, which contributes significantly to healthcare costs for patients, he added.

Last month government had increased import duty on certain medical devices to 7.5 per cent from 5 per cent earlier, a move that was opposed by the industry body Advanced Medical Technology Association (AdvaMed).
"The government's recent decision to raise duties on imported life-saving medical devices and equipment would only exacerbate the financial burden on patients and compromise patient access," AdvaMed had said.
On the whole Reddy said, "The government should prioritise healthcare and realise that a healthy country in turn leads to increased productivity, thus stronger economic development.