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Tuesday, March 1, 2011

Premium healthcare to be costlier with new service tax:


AC hospitals with more than 25 beds have been brought under the ambit of service tax(10%).

In most cases, of the total bill, 50-70% cost is of medicines and consumables and these cannot be defined as 'services'. However, with this additional new tax, the total sum of the hospital bill including the cost of medicines and consumables will increase by 10% which is an unfair hike.

"This proposed new tax would burden the patients. And to avoid the increase in the costs, the healthcare service providers would not prefer to fall under the organised sector.

while the 20% increase in healthcare allocation to R 26,760 crore may seem good on paper, in actual fact, this just isn’t good enough because it does not take into account the full impact of inflation in the past year. I sincerely believe the time for token hikes is long past. We need bold policy measures if India seeks to become a global model for the healthcare sector.

With a median age of 25.1 years, India’s population profile has the intrinsic potential to make these demographics our advantage. But the mounting burden of chronic non-communicable diseases (CNCDs) such as diabetes, hypertension and heart disease could swiftly wipe out this advantage. The WHO estimates that India could lose $237 billion ( 11000 billion rupees ) in national income due to CNCDs over the next decade. The Budget should ideally have provided a tax benefit to encourage health checkups.

Healthcare on the national agenda would have been the key to unlock India’s potential for unparalleled growth. Unfortunately, I don’t see that happening with the 2011-12 Budget.

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