Budget 2016: Healthcare providers like Apollo and Fortis want 10-year tax holiday on new hospitals

New Delhi: Ahead of the Budget, healthcare service providers including Apollo and Fortis, have sought incentive packages, including ten year tax holiday on hospital projects, saying it will encourage investments in the sector.

Besides, the hospital chains said that in order to make healthcare affordable and accessible to all, the government should work with private third party insurance players to reduce out of pocket spending by citizens.

"Government support for this sector is crucial... To encourage investments in medical and hospital infrastructure, clear guidelines, giving substance to the infrastructure status accorded to the sector need to be spelt out," Fortis Healthcare Executive Chairman Malvinder Mohan Singh told PTI.

He further said, "An incentive package with direct tax benefits for capital expenditure and a ten year tax holiday for hospital projects and exemption from GST could galvanise significant investment in the expansion and creation of healthcare infrastructure".

Stressing on the role of government to make healthcare affordable, Apollo Hospitals Enterprise Managing Director Suneeta Reddy said: "In order to ensure affordable and accessible healthcare to all, the government should work with private third party insurance players to reduce out of pocket spending by citizens.

"In an ideal situation, healthcare spending should reach 6 percent of GDP with considerable contribution from the government and private players, where out of pocket spending by individuals is less than 30 percent, she added.

Reddy said healthcare expenditure by the government is currently at 1.2 percent of the GDP whereas countries like China and the US spend 3 percent and 8.3 percent, respectively.

Singh said steps to expand access to healthcare by increasing health insurance penetration need to be taken up.

Calling for a holistic approach to overcome paucity of skilled manpower in the sector, Singh said: "A forward looking policy that provides a realistic framework and encourages the private sector to set up medical and nursing colleges, needs to be announced. This will help overcome medium to long term talent shortages.