Budget 2014 is Balanced, Growth-oriented and Inclusive: Dr. Prathap Reddy
NEW DELHI, March 5, 2013 /PRNewswire/ --
- 15% Investment Allowance Should Apply to Healthcare as Well
- 1% Cess for Healthcare Would Have Been a Good Methodology to Bridge the Gap Between What is Required and What is Available in Terms of Number of Beds, Doctors and Paramedics
Dr. Prathap C. Reddy, Chairman, Apollo Hospitals Group lauded the Finance Minister (FM) for presenting a balanced budget stating that it was growth-oriented and inclusive. Though many had apprehensions about the kind of measures the FM would announce, the heart of the FM was clearly in the right place as he made efforts to get the economy back in shape. There were no radical moves that would upset the applecart.
One of the most appreciable things about the budget is that the FM recognized the importance education and healthcare play in the overall welfare of the nation by calling them as high priority sectors for the government. The budget is geared to create opportunities for growth and offers incentives for the vulnerable and marginalized sections of the society, such as women, the aged and the poor.
Dr. Prathap C. Reddy, Chairman, Apollo Hospitals Group said, "Significant allocations have been made for rural development, health, sanitation, education, skill development, science, and R&D. The budget is directionally good on healthcare, but nothing specific was announced to spur investment in the sector. The allocation of Rs. 37,330 crore for the Ministry of Health and Family Welfare, up from Rs. 30,477 crores in 2012-13, almost one-fourth increase, is a very good development. Yet, even with this, the overall percentage of GDP for health will not cross 2 per cent. This is one of the lowest in the world and can only suffice to manage primary healthcare. The increase should have been 200 per cent. Few years ago, the union government imposed education cess of 3 per cent. Similarly, 1 per cent cess for healthcare would have been a good methodology to bridge the gap between what is required and what is available in terms of number of beds, doctors and paramedics.
Good healthcare is not possible without the availability of an adequate number of doctors, so it was nice to note that the six AIIMS-like educational institutions have admitted their first batch of students. The concerns of the aged have also been kept in mind by allocating Rs. 150 crore for the national healthcare programme for the elderly. Healthcare has continued to be in the negative list of service tax, which is a thumbs-up for the industry."
About Rs. 4,727 crore has been allocated for medical education and research, which will help address the shortage of healthcare professionals, but much more is needed considering the size of the country. Similarly, the budget has allocated around $1.9 billion to combat the menace of malnutrition by subsidizing the sale of grains to nearly 70% of India's population. If implemented correctly, this can be a game-changer in ensuring health of the poor.
"In another positive move, insurance companies are going to be empowered to open branches in tier II cities without prior IRDA approval and banks will be allowed entry into the insurance sector. This will help the penetration of health insurance beyond the metros," Dr. Reddy added.
However, there was nothing specific in the budget for the healthcare industry as such, especially the private players, and for creation of health infrastructure where there still exists a large gap.
Last year, the government did a good thing by allowing 150% depreciation for new hospital projects with at least 100 beds. This should also be extended to hospitals dedicated to treatment of non-communicable diseases consisting of 50 beds and above.
The five-year tax holiday scheme under Section 80IB for healthcare projects needs to be extended from the present 5 years to 15 years because of the long gestation periods involved in turning around new hospitals. The FM has proposed an investment allowance of 15 per cent for plant and machinery for the manufacturing sector. The government has to clarify if this includes services too. In healthcare, we incur huge capex for new beds and recurring capex for acquiring new technology. This allowance needs to be extended to services too, particularly healthcare.
The FM has taken some good steps to facilitate government expenditure in healthcare and he has to be commended for it. But given the need for a huge capital outlay and new infrastructure required, the government still needs to do substantially better in terms of availability of funds and creating an enabling environment for healthcare providers.
About Apollo Hospitals:
In 1983, Dr. Prathap C. Reddy, the architect of Indian healthcare, launched the first corporate hospital in India, Apollo Hospitals Chennai. Over the years, Apollo Hospitals Group has grown to become one of Asia's largest integrated healthcare organizations with over 8,500 beds across 50 hospitals, more than 1350 pharmacies and over 100 diagnostic clinics. The Group also offers medical business process outsourcing services, health insurance services and clinical research divisions with a focus on epidemiological studies, stem cell research and genetic research. To develop talent for the burgeoning need of superior healthcare delivery, Apollo Hospitals Group has 11 nursing and hospital management colleges. These achievements have earned Apollo Hospitals Group several accolades, including the Centre of Excellence from the Government of India and recognition from the Joint Commission International (seven of our hospitals are JCI accredited). In a rare honour, the Government of India issued a commemorative stamp in recognition of Apollo’s contribution, the first for a private healthcare organization. Apollo Hospitals Chairman, Dr Prathap C Reddy, was conferred with the prestigious Padma Vibhushan, in 2010. Apollo Hospitals Group, for over 29 years, has continuously excelled and maintained leadership in medical innovation, world-class clinical services and cutting-edge technology. Our hospitals are consistently ranked amongst the best hospitals globally for advanced medical services and research.
For more information visit www.apollohospitals.com.
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SOURCE Apollo Hospitals Group