Budget 2023-24 Expectation: Encourage PPP model to increase number of medical professionals in the country

The COVID-19 pandemic has made us realize the importance of investing in healthcare. While the government has acted swiftly and allocated more budgets in subsequent years. India, considering its humungous population, still would need an enormous amount of investment in manpower, research and capacity building to beat any such pandemics in the future.

For the Budget 2023, here are some recommendations/expectations from the government:

Encourage PPP model

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There needs to be a concentrated effort to encourage a Public Private Partnership (PPP) model in healthcare. Currently, India has about 500+ district headquarters hospitals spread throughout; the immediate solution to building manpower capacity is to have a medical/nursing college attached to these hospitals. The government can encourage a private partner to come in with investments for building these institutions and thus use the existing infrastructure to churn out more medical professionals.

Expand digital infrastructure

The pandemic acted as a catalyst for telemedicine. The promptness with which India accepted online medical consultations has put the capacity of telemedicine back in focus. Growing at a slow pace till 2020, in just two years, the investments in teleconsultations have grown manifold. The reach of telemedicine into rural, hilly, and tribal areas can be augmented through the existing telecom network or by providing accessibility to telecommunication satellites by the central government.

Tapping health data

With Artificial Intelligence (AI), Machine Learning (ML), and other technological advances taking over our everyday life, the future of healthcare predictions and diagnosis also lies with the kind of health data that we can tap into. A unified health ID for all citizens is a welcome move that will make a seamless flow of healthcare data. This is the right time for the focus to be given to digitisation and technology like AI with funding for research and innovation. The right investments today can help India become a hub for medical device development.

Focus on MVT

Medial Value Tourism (MVT) continues to be a big opportunity for India to tap into increasing foreign exchange inflows. Facilitating the promotion of accredited Indian hospitals abroad for advanced yet cheaper medical interventions will help attract foreign patients. This will not only help the healthcare sector to position itself as an equal competitor but also help boost the image of the country.

Support to implement government schemes

Ayushman Bharat has been a great success in providing coverage to a large number of people in the lower income group. However, the number of facilities providing support to the scheme is limited in both suburban and rural areas. It will be appropriate if the government builds more facilities in such areas or provide support to private healthcare providers to do so through viability gap funding.

In addition to these, Budget 2023- 24 needs to address the specific requirements of the healthcare industry in terms of tax rationalization and other tax matters, dues owed to hospitals related to various government health schemes, and subsidies related to the import of medical machinery.

Charge GST at 0% on healthcare services

Currently, as per the Goods and Services Tax (GST) rules, an exemption is provided for services executed by a clinical establishment. However, services provided to clinical establishments are still taxable at the rates specified, eventually increasing the cost of the provision of healthcare services. Hospitals will not be eligible for utilizing GST charged by the vendors on their supplies (input services) nor claim a refund of the tax charged by the vendors. This burden is now indirectly passed on to the patients.

As a remedial measure, a request would be to charge GST at zero per cent on all healthcare services. In such a scenario, hospitals can claim a refund of the taxes paid to the vendors (input services) as the services provided (output services) by the hospital will be taxed at a zero rate. This will enable a 100 percent refund of the tax paid by the hospitals and the cost of providing health care services shall drastically come down.

Remove health cess

As per the existing law, any healthcare organization importing medical equipment is charged with a health cess of 5 percent in addition to the basic Customs Duty and Integrated Goods and Services Tax (IGST), thus elevating the overall cost of providing healthcare services. Removing health cess will help in speeding up the healthcare infra across the country, making healthcare more accessible.

Bane of direct taxes

The public and private healthcare services came together to combat COVID. It also exposed the healthcare infrastructure gap in the country.  Increasing weighted deduction under Section 35AD of the Income Tax Act from 100 percent to 150 percent for hospitals shall help in accelerating the healthcare infra growth.

Priority sector status

To boost the healthcare infrastructure in the country and having learned lessons from the pandemic, the government can now look at making healthcare a priority sector, similar to agriculture, for lending will result in more accessible debt and lower interest rates.

The writer is Founder Chairman and Managing Director, Aster DM Healthcare. He tweets @DrMoopen @ASTERHealthcare. Views expressed are personal.

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