In a nation like India, where there is no worthwhile social security system in place (notwithstanding high tax rates), healthcare and health insurance assume magnified importance. Without this, even the loudest screams and chest-thumping on the 'India growth story' will sound hollow.
One of the fastest growing and most potent sectors in India is the health-care sector. India is fast becoming a preferred medical destination for patients in the Middle East, Africa and even the West.
There is now growing global realisation that Indian hospitals can provide world-class care at competitive rates. Today, India has big names in healthcare like the All India Institute of Medical Sciences (AIIMS), Apollo Hospitals and Shankara Netralaya.
The sector today has a radical outlook with major emphasis on high skill sets that can leverage technology and medical science, and needs to cater to a critical and inevitable customer needs at affordable costs.
India has the relevant skill-sets with adequate human resources to become the preferred healthcare player in emerging countries across the globe. Increasing urbanisation, superior demographics, better health consciousness and higher life expectancy have enhanced the demand for quality healthcare.
Although the public sector has taken initiatives for the development of healthcare facilities, it has been unable to do too much, thus bringing the private sector into the picture. This in turn, has brought in more capital, better technology and management skills.
The recent Union budgets, too, have been favourable to the healthcare sector. There has been a reduction of customs tariffs on life saving medical equipment, reduction of excise duties on certain critical drugs and the abolition of duties on drugs and materials imported for clinical trials.
Permissible depreciation rates for medical equipment under income tax laws have been increased to enhance cash flows of corporate hospitals in the private sector. Interest on lending for private sector hospitals exceeding 100 beds will improve access to low-cost funding for hospitals.
Notwithstanding healthy competition, several big corporate houses have ventured in and the Indian healthcare sector is slowly but surely, coming of age. The entry of big pharmaceutical companies is a clear sign of strong corporate focus on this sector.
In the next, concluding, part of this column, we shall zero in on the factors that are driving growth in this sector and the road ahead.
The author heads Lotus Knowlwealth and can be contacted at firstname.lastname@example.org