Budget 2024: Healthcare Sector Seeks GST Relief, Incentives in R&D, Local Manufacturing
By: Admin July 10, 2024 Categories: GST Recent News
The Indian healthcare sector has high expectations for the upcoming budget on July 23, 2024. Experts anticipate a significant rise in healthcare spending and investments in rural healthcare facilities and primary care.
The government might introduce policies to improve the quality and accessibility of essential healthcare services, including lowering the GST on these services.
An industry expert highlighted that while the interim budget introduced several initiatives, the upcoming budget should prioritize healthcare infrastructure by increasing GDP spending to 2.5%.
Key Issues in Healthcare
The healthcare sector faces challenges such as a shortage of skilled workforce, indirect taxation issues, and unused Minimum Alternate Tax (MAT) credit. Policies conducive to private sector investment are essential for sustained growth.
Public-Private Partnerships
Strengthening public-private partnerships by introducing new models and policies to boost the adoption of digital healthcare services and promote medical value travel is crucial. Facilitating international insurance recognition for Indian healthcare providers can attract more international patients.
Diagnostics Sector
The diagnostics sector, vital for early disease detection and treatment customization, is crucial in India’s growth. Optimizing PPP models to ensure high-quality outcomes, increasing funding for screening and diagnostic programs targeting Non-Communicable Diseases (NCDs), and investing in training for healthcare workers are essential.
0% GST on Diagnostic Services
Implementing a 0% GST on diagnostic services and facilitating refunds for GST paid on input tax credits can reduce costs and improve accessibility. Lowering customs duty on imported diagnostic equipment and adjusting high GST rates on lab supplies will enhance efficiencies and foster R&D investments.
Increase Healthcare Spending
Healthcare sector stakeholders are calling for significant reforms, including increasing healthcare spending to 3% of GDP, improving infrastructure in rural areas, and strengthening preventive healthcare. Addressing the shortage of healthcare workers through better training and working conditions is also essential.
Health Insurance Ambit
Expanding health insurance coverage, adopting advanced technologies like telemedicine and digital health records, and complying with the India Digital Personal Data Protection Act of 2023 are crucial. The focus on emerging technologies such as AI and Machine Learning highlights the push for modernization in the sector.
Incentives for R&D and Local Manufacturing
In terms of tax policy, incentivizing local manufacturing and R&D activities, providing clarity on GST for business expenses, and aligning rates for pharmaceutical ingredients are crucial for operational efficiency. Simplifying regulations and offering incentives for innovation and skill development can strengthen India’s healthcare capabilities and competitiveness.
By investing in infrastructure, technology, human resources, and clear regulations, the government can improve public health outcomes and support the growth of the pharmaceutical sector, moving towards a healthier and more prosperous India.
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