• An Annual Health Survey to prepare the district health profile of all districts shall be conducted in 2010-11.
• The allocation to Healthcare industry has been increased from Rs 19534 crore to Rs 22300 crore for 2010-11.
• The beneficiaries of Mahatma Gandhi NREGA scheme are also eligible for health insurance cover under the Rashtriya Swasthya Bima Yojana scheme.
• Custom duty on all medical equipments has been uniformed at 5%, CVD of 4% with full exemption from special additional duty. Full exemption currently available to medical equipment and devices such as assistive devices, rehabilitation aids etc is being retained. The concession available to government hospitals or hospitals set up under a statute is also being retained.
• The custom duty on specified inputs for the manufacture orthopedic implants is being exempted.
• New income tax slabs will bring relief to the middle class. The individual with the income of Rs 1.6 lakh will nil tax, above Rs 1.6 lakh up to 5 lakh will pay 10%, from Rs 5 lakh to Rs 8 lakh will pay 20% and above Rs 8 lakh, the rate will be 30%.

Budget expectations

• Infrastructure status should be granted to healthcare industry and tax holiday benefit provided accordingly. Not fulfilled
• Incentivize existing hospitals to get accredited through automatic empanelment in government schemes, cashless insurance transactions etc.: Not fulfilled
• Government should join industry's initiative for deeper penetration of insurance in addition to the efforts already on for below poverty line (BPL) category.: Not fulfilled
• Public Private Partnership should be encouraged in Healthcare: Not fulfilled
• Grant tax holiday for speciality ambulatory hospitals: Not fulfilled

The increase in the allocation to Healthcare industry is key positive move. This will improve healthcare needs in the government hospitals.

Extending lower 5% custom duty on all medical equipment and CVD of 4% with full exemption will decrease the costs of industry and will benefit all frontline hospitals.

The healthcare insurance has also been extended to NREGA program. This will increase the penetration of healthcare insurance in India. According to industry status, the current penetration of health insurance is around 5% of total population. This move will increase this penetration to 20%.

Apollo Hospitals, Fortis Hospitals, Opto circuits and Choksi Imaging

Outlook

The Union budget 2010-11 impact on healthcare industry is neutral. The basic need for healthcare industry i.e. granting industry status is not granted. The increase in allocation to healthcare industry will improve the healthcare services at government hospitals. So this allocation will not give any positive move to the private healthcare industry. The retention of nil custom duty on certain medical equipment and uniform rate of 5% in all medical equipment will help to decrease in the equipment price to hospitals. The effective cost of investments will come down. Overall, Union Budget 2010-11 was neutral with positive bias for the hospital sector.

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