Union finance minister Arun Jaitley began his budget speech with an optimistic statement “that all eyes are on India”. Right from laying the roadmap for accelerating growth, enhancing investment and “passing on the benefits of growth to the common man”, the speech seemed progressive. The focus appeared to be on getting private-public partnerships, removing delivery constraints and providing financial inclusion.
The roadmap for the next four years has been laid with the objective of providing basic infrastructure. One of the major positives has been the mandate to roll out the goods and service tax (GST) regime by 2016. Another complementary step has been the reduction of corporate tax from 30% to 25%. The other tax amendments have been aligned to increase tax compliance and impose stricter penalties on evasion.
Moving on to the focus area of health, the government has taken a major leap in promising health insurance benefits through the Jan Dhan Yojana scheme. The vehicle of financial inclusion has now got the bearing of affordable healthcare. Specifically, the budget has announced health insurance exemption limits from `15,000 to `25,000 for all. Senior citizens have an exemption limit of `30,000. Further, for treating serious ailments they can avail themselves of a deduction of up to `80,000 from the previously existing limit of `60,000. Clearly, affordable healthcare and the focus on the elderly are welcome steps.
Along with setting up one more AIIMS — in Bihar — the government has made allocations for establishing AIIMS in five other states. A pharmaceutical research institute is to be set up each in Maharashtra and Chhattisgarh. This implies a surge in the number of medical and para-medical professionals. The minister also stated that visa on arrival will now be applicable for 150 countries against the existing 43. Medical tourism as a growing industry can gain a lot from these measures.
Even if the overall spending on health has not increased by any significant proportion, the focus has now shifted to efficient service delivery mechanisms. The minister has emphasised that the Swachh Bharat campaign is a preventive healthcare measure in the long run. More can be done in the coming years to invite investment in the sector, including measures like exempting capital gains from REITs from tax. However, considering the state of affairs more strategic reforms are desirable in the following years for healthcare to become affordable and accessible for all.
Prathap C Reddy is founder chairman of Apollo Hospitals Group
The views expressed by the author are personal