NEW DELHI: The Union Health Ministry has submitted a proposal to the Finance Ministry seeking infrastructure status for the healthcare sector, a move which is likely to provide a big boost to the creation of health infrastructure like hospitals and medical colleges.
The proposal note submitted to the Finance Ministry says that the move will not just to enhance accessibility to quality health care on global standards but also enable a big leap in creation of health infrastructure in the country.
According to the proposal submitted to the Finance Ministry, the health care sector should get tax deduction of 100 percent of the profits and gains derived from operating and maintaining hospitals for a period of ten consecutive assessment years, it should be exempt from minimum alternate tax and any new capital expenditure towards replacement of old machinery or equipment should be entitled for 100 percent deduction.
The proposals also said that the healthcare sector should be eligible for loans and financial assistance on a priority basis at concessional rates as provided to the infrastructure sector.
According to the proposal note, which was prepared by the Federation of Indian Chambers of Commerce and Industry (FICCI), the Indian healthcare sector needs the “infrastructure status” as most hospitals make huge investments in the range of Rs. 5,500,000-Rs. 3,000,000 per bed. Consequently, due to the massive amount of capital expenditure involved, the hospitals tend to incur heave losses in initial years.
It also said that savings that augur to hospitals could be ploughed back to expand hospital beds which would assist them improvising the health care facility and the bed to patient ratio.
The amount of deduction shall be 100 percent of the profits and gains derived from such business for a period of ten consecutive assessment years out of 15 years beginning from the year in which the undertaking develops and begins to operate, the proposal said.