NCP's Supriya Sule urges Nirmala Sitharaman to provide policy incentives to encourage investments in health sector -

NCP’s Supriya Sule urges Nirmala Sitharaman to provide policy incentives to encourage investments in health sector


Check her full letter here:

India is witnessing an unprecedented pandemic, and unfortunately, our healthcare infrastructure is being exposed to be inadequate. Heartbreaking scenes can be seen outside hospitals where patients are struggling to find a bed and are dying gasping for breath. Despite spending more money on a health insurance scheme to enable people to access treatment in private hospitals, we neither see large scale investments in setting up new hospitals nor do we see many of them procuring the latest equipment as there are no policies that encourage private hospitals to re-invest their incomes in the health sector.

2. In April 2005 the Union Government had launched the National Rural Health Mission (NRHM) which was later subsumed under the National Health Mission in 2013. The systemic public health program has drastically reduced maternal & infant mortalities; improved emergency response systems that have saved millions of lives. The program demonstrates that clear policies backed by financial resources can yield rapid results in the healthcare sector.

3. The following is a list of policy suggestions for your perusal:

i. Like Agricultural sector, the Health sector could also be covered as a separate sub-category under the priority sector lending policy, with a minimum allocation of 3% of the total capital deposited with the bank. The upper limit for such lending to one organization could be Rs. 1000Cr.

ii. An interest subvention scheme could be allowed for private clinics and hospitals in rural areas, in peri-urban areas, and in small towns for setting up of new enterprises and for capacity expansion of up to Rs. 100Cr.

iii. Greater financial leverage could be provided to hospitals and biomedical equipment

manufacturers so that they can access larger loans to set up new enterprises and expand existing ones.

iv. Waive off the processing fee for loans and hold special loan melas to make hospitals and manufacturers aware of the policy changes and sanction loans on the same day.

v. Orders to maintain status-quo in disputes being heard at Corporate Law & Income Tax Tribunals affecting the health care sector may temporarily be suspended in the larger public interest to enable the production of life-saving equipment & drugs and providing of healthcare services.

vi People may be allowed to make a financial contribution directly to the bank accounts of Hospitals, even those not registered as a trust.

vii. Taxpayers making financial or equipment or medicine donations to a hospital could get exemptions under Section 80G the Income Tax Act with an upper limit of Rs. 5 Lakh in a financial year. The Union Government could develop an online platform to publish the list of equipment and medicines with specifications and costs. Hospitals may publish their demands on the online platform and people could make online contributions or place orders through an e-Market.

Donations made to government hospitals could get 100% exemptions, while donations to charitable hospitals and private hospitals covered under Central or State Health Insurance schemes could get an exemption of 75% and private hospitals could get an exemption of 50% of the value of donated amount. Due care must be taken such that patient’s bills are not routed as hospital donations.

viii. As you have exempted custom duties in import of life-saving equipment, similarly to protect and grow the domestic manufacturing sector, allow tax-free payment of royalties in case of technology transfer to a domestic manufacturer of biomedical equipment and drugs.

ix. Goods and Services Tax exemptions may be given to life-saving drugs and medical equipment to encourage their production in India and enable patients to access necessary treatment at lower costs.

x. The government of India created the Rural Infrastructure Development Fund (RIDF) in NABARD in 1995. The RIDF could be recapitalized and Zilha Parishads may be allowed to borrow from this fund to set up and expand health infrastructure. The Zilla Parishads and Gram Panchayats in the district may be allowed to pay back the installments on the borrowing through the money it would receive as per the 15th Finance Commission in the succeeding fiscal years.

xi. The Union Government had increased the borrowing limits by 2% of GSDP for 5 states that had met certain conditions in May 2020. The borrowing limit may be extended to all states without any qualifying conditions up to a total of 7.5%, but the states may be required to invest the amount borrowed due to the increase in borrowing limits on building capacities in the healthcare sector.

states may be required to invest the amount borrowed due to the increase in borrowing limits on building capacities in the healthcare sector.

xii. Townships consisting of hospitals of different specialties may be encouraged near all cities and in all districts. Hospitals in these townships may be empaneled under Health Insurance Schemes of the Union and the State Governments. Such townships and large multispecialty hospitals may be given the status and all benefits of a Special Economic Zones.

xiii. Persons with an active PM-Jan-Dhan Yojana bank account or any bank account linked to an active MGNREGA job-card may be allowed instant collateral-free & an interest-free loan to pay medical bills for treatment of Covid 19 for themselves or their family members, in case the treatment bill is not admissible under Health Insurance Schemes of Union and State Government. The loan should be credited when they swipe the card at the Point of Sale (POS) machine of the hospital. By linking the databases of the Covid- I 9 India portal and banks, the system could be easily implemented.

xiv. Healthcare workers may be given an exemption from paying their EMI on their education loans for the duration they are actively working on the treatment of covid patients. Education loans of healthcare and frontline workers who get infected while on duty and succumb to the illness may be waived.

xv. Hospitals may be incentivized to hire persons who have been trained under the skill training programs financed by the Union and State Governments.

4. I request you to kindly consider implementing the 15 points policy interventions as they encourage private & public sector investment in healthcare and it would have both short-and long-tens impacts on improving health outcomes in the country.



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