Spend extra 0.5% of GDP on health for next 5 years: FICCI Budget 2021-22 recommendation

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In preparation for Union Budget 2021-22, FICCI has submitted a comprehensive set of suggestions to the government for consideration. As per a FICCI statement, recommendations for the healthcare sector are as follows:

The need to strengthen our healthcare infrastructure has been fortified with the COVID-19 crisis. The Government has already envisaged increasing public spend on healthcare to 2.5 per cent of GDP (from around 1.3 per cent currently).  We urge the Government to start spending an extra 0.5 per cent of GDP every year on health for the next five years.

To strengthen health infrastructure in the private sector, certain tax incentives may be considered –

• Extend tax benefits under Sec 35AD (100 per cent deduction on capital expenditure) to all hospitals. Currently it is applicable only to hospitals having minimum capacity of 100 beds.
• Weighted deduction (150 per cent of capital expenditure) be allowed to healthcare providers for CAPEX incurred for fighting COVID pandemic (Significant fresh investment in medical equipment like CT scans, laboratory apparatus, setting up ICUs etc. has been done).
• Incentivise skill development in healthcare to bridge the huge skill gap. Provide weighted deduction of 150 per cent of expenses incurred on skill development in healthcare sector (hospitals and diagnostic centres).
• To incentivise health insurance for individuals and encourage voluntary purchase, the quantum of deduction towards payment of medical insurance premium should be enhanced (to Rs 50,000 from current Rs 25,000).
• Consider launch of Health Infrastructure Fund and Medical Innovation Fund. This would facilitate greater access to capital for the industry.
• Medical Value Tourism (including AYUSH related tourism) can be a significant contributor to foreign exchange and should be promoted.