This story is from February 19, 2007

Budget may offer sops to healthcare

Amrita Nair-Ghaswalla & Namrata Singh / TNN / Feb 19, 2007, 23:53 IST

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Healthcare may get infrastructure status in the forthcoming budget, sources said.

MUMBAI: Healthcare may get infrastructure status in the forthcoming budget, sources said. For three years now, the industry has been demanding priority status along the lines of IT and telecom.
Currently, spending on healthcare is just 1% of GDP. As against this, the World Health Organisation (WHO) recommends 7.5%. By granting the sector infrastructure status, this number could rise to 3%, sources said, because funds will flow in more easily from funding institutions.
Sources added that the finance minister is also expected to announce higher budgetary allocation for healthcare in the forthcoming Budget."He is expected to set a roadmap for bridging the gap between the urban-rural divide on healthcare services," they said.
The government is also said to be looking at implementing some of the recommendations of the task force on public private partnership (PPP), instituted by the Planning Commission. "Given the large financial investments that would be required, the private sector would have to shoulder a part of the responsibility. The government could offer incentives in terms of subsidised rates for real estate and a 10 year tax holiday," said Aditya Bahadur of the Indian Healthcare Federation. "This could spur private investments in under-served areas," he added.

Different sections of the industry, which spoke to TOI, said PPP was the need of the hour. "Since the government finds it unviable or even unsustainable to increase its healthcare spend, PPP is an ideal answer," they said.
Indian Medical Association’s Sanjiv Malik, who was part of the task force on PPP, said that the idea of a SEZ on health was mooted. "We have 250 plus medical colleges in our country. When they come to the government for renewal of their registration, they should be made to adopt 200-400 villages in the vicinity of 50 kms."
Early last month, a study by McKinsey & Company had projected healthcare spending to increase from Rs 86,000 crore in 2000-2001 to Rs 2,00,000 crore in 2010. But this would require investment to the tune of Rs 1,00,000 crore and 80% per cent of this would have to be borne by the private sector, the report stated.

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