Budget Reactions

Favourable

Brig Joe Curian,
CEO,
Hinduja Hospital,
Mumbai

For the first time in the history of independent India, importance of health care industry in private sector has been recognized by the finance minister, making it a part of the five basic priorities for quality of life. The attraction of this sector for investments has been enhanced with a vision to make India a global healthcare destination. Also, the depreciation rates have been increased to make available more cash for catering fast technological obsolescence and maintaining contemporary standards.

The reduction in customs duty of life saving equipment & excise duty on certain drugs would reduce the cost of the application latest technology to the patient. This shall also leverage the country’s competitive position in global markets regarding cost of treatments and other healthcare products.

The community based heath insurance scheme is a much desired social benefit. Though the exact schemes of GIC and its implications on enhancing the health care of Indian common man would have to be scrutinized closely when the same is launched, it is positive step. Mostly the budget provisions are targeted towards the investment & return oriented health care industry.

It somehow has not been able to affect the largest constituent of private health care delivery i.e. ‘Charitable Institutions’. If these institutions or philosophy would have been specifically targeted, the results would have been exponential in nature.

Heartening
M L Bhakta,
President, Association of Hospitals (A forum for not-for-profit hospitals in Mumbai)

We congratulate the Finance Minister for presenting a forward looking and thought provoking budget. This is possibly the first time that the Union Budget gives added importance to the subject of health. We are very happy to note that special recognition is given to the healthcare industry and incentives are proposed for the benefit of the healthcare industry.

It is heartening to note that the Hon’ble Finance Minister has accepted the need to encourage private hospitals to either establish new or to expand existing facilities He has also recognised the yeomen services rendered by “not-for-profit charitable hospitals” and their contribution to the national health care and has not withdrawn the exemption provisions in the Income Tax Laws applicable to charitable trusts, as recommended by Kelkar Committee.

The idea to promote India as a global health destination is most welcome. The hospitals and doctors in India are fully equipped to render health care which can be compared with the best in the world and that too at a comparatively low cost. This idea will not only give additional boost to our expertise but would also earn valuable foreign exchange for our country.

The health care industry and hospitals have been clammering for reduced duty structure for life saving drugs and equipment. We are happy that the Hon’ble Finance Minister has accepted the need. Depreciation on life saving equipment is also substantially increased enabling quicker replacement of equipment which becomes outdated very fast. The announcements to set up an universal health insurance scheme for the country and offering fiscal benefits to boost private medical investment are very encouraging and will be of great help in strengthening the healthcare sector in the country.

Putting healthcare on the radar screen
Analjit Singh, CMD,
Max Healthcare

The Budget is indicative of the fact that the healthcare sector has finally been recognized as an industry and is on the radar screen of government policy makers. This will ensure the improvement in healthcare services and will prevent further fragmentation of the sector. The inclusion of private capital under Section 10 (23G) for the expansion and establishment of 100-bed and larger private hospitals will help improve and expand the scope of healthcare services in India.

The higher depreciation levels for medical equipment and concessions to manufacturing life saving equipment and life saving drugs will help give a needed fillip to the healthcare industry.

This will have a dual effect on the Indian healthcare industry by providing financial incentives and encouraging larger scale hospitals.

Customer friendly
Dr Naresh Trehan,
Executive Director,
Escorts Heart Institute, New Delhi

This year’s Budget is a customer friendly Budget that will facilitate cheaper medical services and medicines. Healthcare was brought to the forefront by giving priority status for the first time and provided incentives similar to infrastructure industry. This would encourage setting up of more hospitals at a lower cost.

The reduction of customs duty on vital equipment like that for CAT scan would also benefit the common man after three-six months as the imports would take that much time. The reduction in customs duty on equipment used by the disabled is another welcome move. A very positive step is paving way for health insurance system with which we hope to create hospitals in small villages where basic healthcare facilities can be provided.

Boost to the social sector
Sangita Reddy,
Director,
Apollo Hospitals, Hyderabad

The budget proposals encourage increased role of the private sector in the healthcare industry. The health insurance proposals are a boost to the social sector and will promote savings in the houeholds towards healthcare needs.

Due importance given
Dr B Soma Raju,
Chairman,
Care Hospitals, Hyderabad

Government has made the right move by giving importance to the healthcare sector. By providing duty relief for life-saving equipment, the cost towards infrastructure will reduce and enable increased access to healthcare facilities.

The proposals are also favourable for the hospitals to extend their services to more patients.

Insurance is welcome
G S Rao,
Executive director, Yashoda Hospitals

Budget is favourable for medical and healthcare sectors. The finance minister’s proposals towards health insurance is most welcome. Duty reduction on life-saving equipment and life-saving drugs was in the interest of patients.

Exciting budget
Dr Devi Shetty,
Chairman, Narayana Hrudayalaya,
Bangalore

In simple sentence, I am excited with the health implications of the recent Indian budget. The Finance Minister has clearly pointed out that he would like to see India as emerging a healthcare destination for this part of the world. He made sure that there are investment opportunities by giving tax incentives for the financial institutions to lend money. He also meant business by reducing the custom duty on imported medical equipment without which the cost of healthcare will never come down especially the hi-tech healthcare. However there is lot of difference between what the politicians proclaim in the Parliament and in realty. I will give a simple example. The proclamation by the FM was that all the custom duties will be reduced to 5 per cent but if you really go through the custom duty manual the cardiac monitor, which is the commonest medical equipment used for monitoring any patient, may be suffering from heart, cancer, gall bladder or brain operation carries a custom duty of 37 per cent. This is unacceptably high since it is one of the basic equipment what is required. So I strongly recommend that the medical industry closely interact with the custom duty officials and trash out all the differences. On the whole it is an excellent budget probably the best budget for the health care sector in the recent past.

Progressive step
Dr H Sudarshan,
Vigilance Director of Lokayukta (Health, Education and Social Welfare)

Health insurance scheme is definitely a progressive step taken up by the centre. But how far it will be a success we should see. How many poor people will be able to pay the balance amount? It is very difficult for people below poverty line. Also there is a need for somebody to monitor the programme because the government alone cannot do this and it need to have third party because there may be some false claims made. Otherwise it is a wonderful scheme. However pilot project should be started which can then be extended to other parts of the country.

Interesting attempt
Dr A C Sreeram,
Director, Mallige Medical Centre & President,
IMA-Bangalore Chapter

Budget 2003 is an interesting attempt by the Finance Minister Jaswant Singh to boost the economy and lease the middle class who form the bulk of the supporters of his party. For doctors this has been a very good budget. Healthcare industry has got a major boost. With a view to encourage establishment of more private hospitals, the FM has offered the benefit under Section 10 (23G) to financial institutions that provide long-term capital to private hospitals with more than 100 beds. Abolition of duty on drugs and materials imported for clinical trials should boost the much-needed medical research in our country. Reduction of corporate surcharge is welcome. The new policy should encourage investors to bring more money into the capital market. The community-based universal health insurance is an excellent scheme that will take care of the health of the poor and also boost the healthcare industry. For as low as Rs 2 a day a family of 7 can expect reimbursement of hospital expenses of up to 30,000. For families below poverty line, Government has come forward to contribute Rs 100 towards their annual premium.

Not good overall
Dr Thomas Chandy,
Medical Director, HOSMAT Hospital, Bangalore

This year budget has not been good overall for the healthcare. Tax benefits for the financial institutions and banks to fund hospitals over 100 beds will make access of funds easier as healthcare is very capital intensive. Depreciation for equipment purchase which has been increased from 25per cent to 40 per cent is a positive step, as medical equipment becomes obsolescent and outdated. This helps the hospitals to maintain high standards by getting better equipment.

Drug import is reduced from 30 to 20 per cent which is still too high. It is good that senior citizens will get new low premium insurance being started at Re 1 per day or Rs 365 per year . Implants excise and custom duty has not been reduced. Life savings equipment reduced from 25 to 5 per cent. However, many of the life saving equipment were already in the low bracket.

The negative aspects are:1. For implants ,excise and custom duty has not been reduced. These are expensive and essential items. 2. Service tax that has been increased from 5 to 8 per cent is not good as this adds to the overheads of the hospitals. Service tax must be removed in full. 3. Hospitals unlike other infrastructure sectors do not receive any tax holiday or SOPS. 4. Insurance premium tax exemption for health insurance is low. Insurance Premium without limit should be fully tax exempt with no limit. 5. A new value added has been implemented as sales tax to 12.5 per cent. This replaces the State tax, some states were not charging tax on purchases are diverted to those sales tax was it range of 6 to 10 per cent.

This will place an additional burden to the hospitals. Health care cost on hospital budget is a major part of a family budget health care expenses should get tax exempted on their family health care. Company’s health insurance premium for it employees should have extra tax benefits and companies paying for employees health insurance.

Healthcare boom
Dr Sujit Chatterjee
CEO, Dr L H Hiranandani Hospital, Mumbai

The budget proposal this year focuses basically in three areas: contribute to enhanced national health, promote India as a global health destination and easier access to disadvantaged to healthcare facilities. There have been concessions in the duties and taxes for all the life saving items. We may also see some real innovative schemes evolve related to healthcare by the PSU Insurance agencies that control almost 75 to 80 per cent of health Insurance market. This may make it difficult for the private players.

With India being promoted as a health destination, we will see greater accreditation moves to emulate standards as seen in the west. Also there will be a move towards evidenced based medicine and greater accountability. There will be a general boom in the healthcare segment in the decade ahead. The Government will also think in more public-private partnerships where both parties will have to contribute in equal measure to ensure that the common person gets comprehensive healthcare.

Inroads for small hospitals
Dr R.V. Karanjekar,
Medical Director, Fortis Heart Institute and Multi-Speciality Hospital, Mohali

I feel the budget presented this year by Mr. Jaswant Singh is a step in right direction. The healthcare industry is on the threshold of big takeoff. At this moment it was very essential to give the stimulus for growth. The skills in healthcare industry can earn fairly large amount of revenue from foreign countries if they set up the centers of excellence. The present budget provisions not only gives the stimulus to healthcare but it also gives stimulus to insurance sector which will be ultimately instrumental for our growth.

The provisions in the budget regarding the investment in tertiary hospitals beyond 100 beds will really help the investors and even the promoters debt funding. This will certainly reduce the burden on the hospitals and more and more tertiary care hospitals can come up.

The exemptions in taxes or interest will give some relief to them. I feel the funding for health projects beyond metro cities in backward or semi backward areas like C and D zones should be considered as risk investment and this should not attract interest more than 3 per cent to 5 per cent. This will make the inroads for small hospitals all over the country in a big way. Health infrastructure in any region plays a vital role in the development of that region.

Appropriate health structure attracts the skilled employee and senior personnel from all over the country. Lack of such facility dampens the growth. In my opinion, this step in this year’s budget should be taken to logical conclusion in next 3 to 4 years.

Best budget so far Vishal Bali,
Vice President, Wockhardt Hospitals,

This is the best budget so far, which have accorded the much coveted infrastructural status to healthcare sector. It has given incentives for public insurance, which would make medical care affordable to the common man. The incentives would set up high standard of quality of medical care. The extension of tax benefits to hospitals above 100 beds would loosen the purse strings of financial institutes and encourage growth of more hospitals.

Feel good budget
Ranga Iyer,
Managing Director, Wyeth Lederle Limited

This is the most populist budget for healthcare, which has the typical feel good factor. With election around the corner, Singh just knew what to dish out to please everybody. He marketed the budget very well. He first scared people with the fear of more taxes, and then pleased everybody by reducing them. The extension of tax benefits for hospitals with more than 100 beds would result in boom of hospitals in major cities.

This is extremely important for medical tourism. The pharmaceutical industry would also benefit by reduction in taxes in R&D. (He spoke at the SIES College of Management Studies)

Thrust to primary care
Dr Deepak Patkar,
Radiologist, Dr Balabhai Nanavati hospital, Mumbai

The FM has given a big thrust on primary as well advanced healthcare. Reduction of duty will make healthcare more affordable.