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DMAI wants govt to revoke all taxes on healthcare in Union budget

Suja Nair Shirodkar, Mumbai
Saturday, March 12, 2011, 08:00 Hrs  [IST]

The Disease Management Association of India (DMAI), a non-profit organisation propagating disease management concept and tools in the country, has demanded the Central government to revoke all the proposals relating to fresh taxes on pharmaceuticals and healthcare in the union budget. The Association points out that at present, majority of the people in the country are taking loans for treatment and the government has no right to dissuade people from doing so by taxing the already expensive healthcare services.

In a letter addressed to Nitin Gadkari, president, Bharatiya Janata Party (BJP), Rajendra Pratap Gupta, president and director, DMAI stressed, “The government must understand that the changes that they aim to make should be more patient centric. Over 30 million people go below the poverty line every year due to healthcare expenses and for them, treatment is worse than disease. We want the government to relax the service tax for the clinical establishments that are partially air-conditioned having less than 30 beds for in-patient treatment.”

This letter was sent in response to the Finance Minister (FM) Pranab Mukherjee's proposal to impose an effective service tax of five percent on all services, including diagnostic services, provided by centrally air-conditioned clinical establishments having more than 25 beds for in-patient treatment.

Besides this, proposal by the FM also states that service tax would also be levied on services provided by consultant doctors operating from premises of such hospitals. Excise duty on medicines is proposed to be increased from four to five percent, which may make medicines costlier. In addition to this, for the first time, traditional medicines are also proposed to be brought within the ambit of excise duty.

It is obvious that as the cost for hospitals or health care gets higher it will get reflected on the expenses of the patients making it unaffordable for the common man.

“One of the biggest challenges in healthcare is not technology, medical errors, compliance, prevention or disease management. They are all just opportunities coming out because of us failing to address the biggest challenge i.e. to convert suffering populations into active patients. The role of the government has to evolve from provider, payer and regulator to being a part provider, part payer and pro-active regulator,” he added.

Gupta suggested that the Government must come out with a scheme that will ensure all the people who have health insurance get tax rebate so that more people will be encouraged to take it. Secondly, he suggests that the government should reduce the tax on preventive health care check-up from 10.3 per cent to 4 per cent.

He stressed that the government needs to think more from the perspective of the patient than the industry as they are responsible for them. He suggested that to bring worthwhile changes in the Indian healthcare system the government needs to set up a patient care collaborative organiasation in the country which is non-existent today.


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