Apollo Hospitals expects tax exemption on forex earnings in the Budget

Apollo Hospitals Group is expecting the Union Budget 2020 to bring in tax exemption for foreign exchange earnings, which may help medical tourism, and a return of the 150 per cent weighted depreciation scheme under the ambit of income tax, in some form.

Speaking to Business Standarad on the sidelines of announcing a tie up with Bajaj Finance for a first-of-its kind Health EMI Card, Suneeta Reddy, managing director of Apollo Hospitals Group said, "We expect that there will be something for infrastructure spent. We hope the government will consider tax exemption for foreign exchange earning, because now it is about 12-14 per cent of total revenue." 

Saying that the government has shown interest in encouraging foreign medical travel to India, she noted that a reinstatement of the 150 per cent depreciation scheme for industries, which are into new technology and hospitals, would help a lot more in terms of creation of infrastructure.

"We believe that the government is committed to growing healthcare because the government can't pay for everyone's healthcare. In terms of making healthcare insurance mandatory, there is a hope that the government will consider this as well. They have already brought down the corporate tax and we must be reasonable in our expectations," she added.

Commenting on plans to reduce promoter pledged shares, Reddy said that while they would be brought down to around 28 per cent by the end of the current quarter, plans were afoot to further bring them down to 10 per cent in next two years using free cashflow from the education vertical.

The company has appointed McKinsey to expand its pharmacy business to omni-channel opportunities, like online pharmacies.

The company on Tuesday announced a co-branded health EMI Card in association with Bajaj Finance Ltd for patients to convert their medical expenditure into no cost EMIs that can be repaid in 12 months. It will offer a credit limit of up to Rs 4 lakh and othe benefits across the Apollo Hospitals network. While this is the first such opportunity for Apollo Hospitals to offer EMI option for their services, for Bajaj Finance, this is a foray into the treatment part of healthcare covering around 600 procedures though they have been offering financing options for cosmetic therapies.

"We used to finance gadgets, homes and two wheelers etc. This is the first time we are doing services. It is very different from financing products, as we are slowly and gradually understanding. We hope we gain from the partnership with Apollo Hospitals in understanding how do we finance services," said Rajeev Jain, managing director, Bajaj Finance Ltd.

Both the companies will work together to expand the offerings to more procedures, said Rajeev Jain, managing director of Bajaj Finance Ltd. Bajaj Finance, which has so far distributed 20 million EMI cards, said that for healthcare, the average limit is 1.3-1.5 times more than what it offers in other sectors. The company started to work in lifecare financing two years ago, and started with electives like dentistry, hair transplants, etc to understand the industry and gain confidence in complex procedures.

Prathap C Reddy, Chairman of Apollo Hospitals Group said that in Apollo's 36 years of experience, most of the customers come back and pay for services even if they do not have sufficient money to clear the bills initially. The EMI scheme would help more customers to avail healthcare services, he added.