PRE-BUDGET RECOMMENDATIONS 2013-2014 – Amit Mookim, Partner & Head of Healthcare, KPMG in India

The Indian healthcare industry is rapidly growing and it is expected that the sector will touch $250 billion by 2020. The success of the health sector ranging from improved health care facilities to low cost treatment has been primarily driven by private enterprise. The research and development (R&D) facilities in the nation have undergone a huge improvement. Currently the per bed capacity in India is 0.9 beds (per 1000 population) as compared to 2.4 beds in UK, 3.1 beds in US and 4.1 beds in China. The major players in the healthcare sector are actively participating in the growth through expansion plans and putting in huge investments in the sector.

Incentive and favorable policy measures would provide impetus for the further growth of the healthcare sector. The industry expects certain measures from a direct tax perspective which would boost the investment in the healthcare sector.

The healthcare sector should be granted the “infrastructure status” for improvement in investment activity and to avail the benefits conferred to the infrastructure sector and enabling market forces to partly address the issues faced.

Tax deduction of 100 per cent of the profits and gains from operating and maintaining hospitals for a period of 10 consecutive assessment years, beginning with the initial assessment year in any 15 year period from the date of operation of the hospital, anywhere in India would be appreciated.

It is expected that healthcare sector be provided exemption from minimum alternate tax and healthcare sector be eligible for loans/financial assistance on priority basis at concessional rates.

Benefits such as weighted deduction of 250 per cent on approved expenditure incurred on research & development activities pertaining to indigenous development of medical technology, bio-technology and weighted deduction of 250 per cent on approved expenditure incurred on telemedicine and remote radiology for should be introduced.

Policy measures like increase in public spending to 2.5-3 per cent of GDP over the 12th five year plan, free/concessional land and use of public healthcare facilities for private medical colleges in focus states, PPP model for private sector participation in screening and detection programs of the government would be much appreciated.

India’s economic growth and rapid urbanisation is bringing with it an expected health transition in terms of shifting demographics, increasing ability to afford quality healthcare, changes in morbidity pattern with growing degenerative and lifestyle diseases, and increasing penetration of health insurance. As the Indian healthcare industry has been displaying strong growth prospects, many foreign companies have been displaying eagerness for investment and setting up their base in India. This would pave way for improved infrastructure facilities and network systems in the country for the growth of the Indian economy.