A five-year tax exemption for rural hospitals indicates that the government is keen to attract private healthcare to villages. But not all investors are biting. Most of them feel hospitals in rural areas will not get enough patients to make it a viable investment.
“Such a sop is a paradox as a 100-bed hospital in a village is not going to make any money, so the tax liability will anyway not exist. An exemption for 100-bed hospitals in urban areas and smaller ones in rural areas would have been a better idea,” says Dr Naresh Trehan, executive director of Escorts Heart Institute and Research Centre.
Apollo Hospitals Group chairman Dr Prathap C. Reddy is a little more positive. “We are running nine hospitals with a capacity of around 900 beds in rural areas, and the new tax exemption will be applicable to them, so it’s good news for us,” he says.
Though Ganga Ram Hospital has no units in villages, its chairman Dr S.K. Sama feels the tax exemption will attract investors, especially in affluent states. “There’s no dearth of money in rural areas and people are willing to pay for quality healthcare at their doorstep. So I think the tax exemption should make a difference,” he says.
But since affluent villagers can afford to travel to speciality hospitals, it seems unlikely that the tax exemption will prompt the private health sector to start working on blueprints for village hospitals in the near future.
But since affluent villagers can afford to travel to speciality hospitals, it seems unlikely that the tax exemption will prompt the private health sector to start working on blueprints for village hospitals in the near future.