Confederation of Indian Industry (CII) in its pre-budget memorandum, urges to the government to accord 'National Priority Sector' status for Healthcare in India. The government should extend the benefits of Tax Holiday on Income under Section 80-IA to all healthcare facilities irrespective of the location (Urban, Semi-urban& District HQ) apart from the rural areas.
The Indian healthcare sector's unprecedented transition from a static sector to an increasingly dynamic & significant industry, today, has led to better economic performance and prosperity. Sensing this shift, CII in its pre-budget memorandum, urges to the government to accord 'National Priority Sector' status for Healthcare in India. With its sole mission to provide affordable & accessible quality healthcare for all Indian citizens, this step would be the impetus of increased economic growth rate and life expectancy of the Indian population.
In the light of enhanced healthcare indices, rising with each passing day, CII's pre-budget memorandum clearly states that the government should extend the benefits of Tax Holiday on Income under Section 80-IA to all healthcare facilities irrespective of the location (Urban, Semi-urban& District HQ) apart from the rural areas, where the scheme is existing presently and the limit be raised to 10 years from the present 5 years bar. This will result in greater mobilization of Domestic & Foreign investments in the healthcare sector & would duly recognize its efforts. Specific allowances akin to the investment allowance under Section 32A are much needed to provide a fillip to the healthcare service sector.
Furthermore, to intensify the industry, additional support in terms of Physical infrastructural measure including procurement and leasing of land by State Government for building hospitals, establishment of Healthcare Up-gradation and New Investment Fund, amortization of certain preliminary expenses under Section 35 D, set-off or carry forward of accumulated Losses and unutilized depreciation benefits for under Section 72 A and relaxation of conditions to facilitate restructuring, have been recommended. It has also been strongly emphasized that Healthcare services should continue to be NOT taxed under the services tax, as any levy of services tax would increase the over all Healthcare costs to the patients
The memorandum also proposes Healthcare Real Estate Investment Trusts (HREIT) to be facilitated to help healthcare providers to overcome the burden of investing in land and building so as to free resources for the core healthcare delivery.
Another area, which needs immediate government attention, is the scope of medical research & development initiatives. Development of the right mechanism would certainly pave way for better human resource infrastructure. It also stresses upon extending benefits under Section10 (23C) to profit-making organizations/training institutes, doubling the number of postgraduate course seats and encouraging mutual recognition of foreign degrees in the healthcare sector.
Other recommendations that have been made include introduction of deduction in respect to medical insurance premia to corporates & individuals buying group health insurance plans and creating attractive environment for achieving localized production of medical devices in order to cut down the import costs incurred by hospitals,
A renewed focus on healthcare in the country will result in the consumer benefiting in terms of accessibility, price & quality of healthcare delivery. Investments in medical research, promotion of private initiatives, device manufacturing & drug discovery and penetration of health insurance could bring in unparalleled gains for the country. Increased investments, accelerated tax compliances and higher standards would increase tax revenue collections from the sector thus profiting the economic growth rate on the whole.
Given the colossal task to deliver healthcare to ever growing population, sustain link between health & economic growth and project India on the global healthcare map, 'National Priority Sector' Status for Indian healthcare sector must be accorded by the Government for the industry to grow and be economically productive.