Singh has done a commendable job

Dr M T Raju,

This is the first budget of its kind that has recognized the need of development of social capital and not just economic capital by giving a boost to the hospital sector and community-based health insurance scheme. According to me, that we have a fiscal deficit is not so important. What is more important is that there is growth in the economy. In my opinion, the sops declared for the healthcare sector would steer the country to more economic prosperity.

No budget should be seen in isolation, but as the continuity of what was proposed in the earlier one. But every budget should be a step forward in the growth of economy. Jaswant Singh has done a commendable job. It is good that the budget has recognized the importance of private healthcare sector and given a boost to it. With the few resources that the government has, it is important to encourage private participation. The private sector accounts for as high as 70 per cent of the Indian health care market. India’s healthcare industry is expected to grow by around 13 per cent a year for the next six years, according to the CII-Mackinsey report. This budget is a step in this direction.

Corporatisation of healthcare has brought in transparency in the system and set high standards of care, which are on par with the developed country. Generally growth of economy conflicts with the individual benefits. But this budget has given many health care incentives for the common man, without blowing damage to the economy. The extension of tax benefits to hospitals above 100 beds would lead to growth of more hospitals. This would give a boost to medical tourism, which would enable India to earn more foreign exchange. It would also create more employment opportunities.

This time the benefit was restricted to above 100 beds because of the fear of misuse of the scheme. However, we can expect that five years down the line the extension would be extended to hospitals above 50 beds. In the future people would definitely invest more in the healthcare sector. Already a few hospitals are on the stock market list, and I am sure that more would come up. But at the same time, I must add that one should not expect that the returns to come soon. It takes some time for a hospital to get recognition and start making profits. The community based health insurance scheme would take care of the health of villagers. Though speculations may be rife about the unviability of such a scheme due to bureaucratic hassle, I don’t foresee any problem, if LIC chalks a well-defined policy.

(The author is Economic Adviser with Securities Exchange Board of India)