Published On: Mon, Jan 22nd, 2018

PRE-BUDGET EXPECTATIONS – 2018

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By Dr. S Gurushankar, Chairman, Meenakshi Mission Hospital & Research Centre, Madurai, Tamil Nadu

‘Give incentives for setting up hospitals in rural areas’

MADURAI / January 22, 2018

From Independence, the healthcare sector has got the least priority in every Union Budget. This is inexplicable because a country cannot progress if its people are unhealthy and keep dying for want of basic healthcare. Most of the Indian population lives in rural areas, but it is unfortunate to see that majority of hospitals exist in urban areas. One of the biggest challenges facing our country is the acute shortage of hospital beds in rural areas. Healthcare services are lopsided in favour of cities. A major thrust is needed to increase the number of hospital beds in rural areas to improve India’s healthcare parameters and save lives of millions of people every year.

Historically, Governments have given no incentives to entrepreneurs for setting up hospitals in rural areas. Whether city or village, the construction and running costs of a hospital are largely the same, and so is GST on medical equipment. However, the affordability factor of an urban patient is several magnitudes higher compared to rural patients. It therefore makes far more sense for a healthcare entrepreneur to build hospitals in cities rather than rural areas. It is a sad situation – while Government healthcare facilities are non-existent in rural areas, there are no incentives to build private hospitals either. Consequently, rural people are forced to live without healthcare services. Do their lives have no value?

 

To address this issue, the upcoming Budget needs to offer incentives to encourage and empower healthcare entrepreneurs to build hospitals in rural areas. Three steps can be taken: a 10-year tax holiday for new hospitals in villages and rural areas; accelerated depreciation (100% in the first year itself); and zero GST for life-saving medical equipment used in setting up rural hospitals.

This will ensure that growth of healthcare facilities is not focused on cities alone, but also spreads to hinterland India. Once the regulatory ecosystem favours setting up hospitals in rural areas, the challenge of healthcare access can be successfully met.

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