Budget 2024: Tax Benefits On Opening New Hospitals To R&D Push; Here’s What The Healthcare Sector Eyes

In the Interim Union Budget for FY25, Finance Minister Nirmala Sitharaman announced substantial measures for the health sector. The budgetary allocation for FY25 was Rs 90,171 crore

As the government is all set to present the Union budget 2025, most likely at the end of July, the healthcare sector is eying more support from the government ( Image Source: ABPLIVE_AI )

Budget 2024 Expectations: Healthcare is one of the most crucial sectors that play a significant role in a country's development. The strength of the healthcare industry can make or break a country, as we all saw in the COVID-19 pandemic. As the government is all set to present the Union budget for 2024-2025, most likely at the end of July, the sector is eying more support from the government.

In the Interim Union Budget for 2024-25 presented in February 2024, Finance Minister Nirmala Sitharaman announced substantial measures for the health sector. The budgetary allocation for 2024-25 was Rs 90,171 crore for healthcare, an increase from Rs 79,221 crore allocated in the previous fiscal year of 2023-24.

This time, as well, the sector expects the same generosity from the central government. "A country’s healthcare industry acts as a barometer. If it is in good health, it signifies two things: not only is the physical health of the population good, but the health of the economy is also robust. The contribution of the healthcare industry towards economic indicators is significant,” said Dr Gurushankar S, Chairman, Meenakshi Mission Hospital & Research Centre.

Gurushankar S stressed that the government has made commendable strides through initiatives such as the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), aiming to provide affordable healthcare to all. However, for this scheme to achieve its full potential, there is a critical need for more hospitals in smaller towns and semi-urban areas that can participate in the PMJAY scheme. Achieving this requires the government to offer a tax holiday to encourage doctors and healthcare entrepreneurs to establish new medical facilities beyond metropolitan areas. This approach is essential for extending affordable healthcare to underserved regions and ensuring the success of the PMJAY initiative.

Special Interest Rates On Bank Loans

“Hospitals also need to be given special interest rates on bank loans. The healthcare industry is a capital-intensive business. Establishing a new hospital requires investment in medical equipment, which is mostly imported and quite expensive. When capital costs are high, the break-even period stretches to 10 years or more, putting healthcare entrepreneurs at risk. To reduce the break-even time and make it viable to open new hospitals in smaller towns, the government needs to provide these incentives. This approach can help balance infrastructure development between urban and rural healthcare,” he added.

"At SRM Global Hospitals, we anticipate budget allocations in primarily three areas, namely building a robust ecosystem that would boost medical tourism, making digital healthcare accessible till the last mile of the country and improved insurance coverage for everyone to access quality healthcare,” opined Dr V.P.Chandrasekaran, Chief Operating Officer, SRM Global Hospital, Chennai.

He added that he is optimistic about increased budget allocations for research and development, particularly in drug discovery for emerging diseases. 

“As we strive to establish ourselves as global leaders in the pharmaceutical and healthcare sectors, we anticipate that the government will offer essential incentives and exemptions. These measures will support our efforts to expand our medical services and capabilities, enabling us to uphold our commitment to delivering world-class healthcare through cutting-edge technology,” said Chandrasekaran.

Dr Sanjeev Singh, Medical Director of Amrita Hospital, Faridabad, said, “The health sector is not just a critical component of public welfare but also a significant contributor to the nation’s GDP. Currently, the healthcare sector contributes approximately 1.7 per cent to the GDP.”

Singh added that strategic investments and reforms can significantly increase this contribution. The budget should elevate the healthcare sector’s GDP contribution to around 5 per cent over the next few years. An increased budget allocation is crucial for building and upgrading hospitals, clinics, and diagnostic centres. This investment will improve access to healthcare services and enhance the overall quality of care provided to patients.

He believes that allocating funds towards preventive measures, including vaccination drives, public health campaigns, and regular health check-ups, can mitigate the long-term burden on our healthcare system. “It is essential that the budget includes provisions for training and development programs for doctors, nurses, technicians, and support staff,” he said.

“Public-Private Partnerships by offering tax incentives and simplified regulatory frameworks, bringing collaborations expertise and funding, thereby enhancing the overall efficiency and effectiveness of healthcare delivery. By focusing on infrastructure, preventive care, research, workforce development, and fostering public-private partnerships, we can build a resilient and robust healthcare system and transform healthcare,” concluded Singh.