Image Source : FILE The doctors’ body said the government should conceive a zero-rate Goods and Services Tax (GST) on healthcare services, allowing the service providers to claim input tax credit.
The funds for the Ayushman Bharat Pradhan Mantri Jan Arogya Yojna (AB-PMJAY) should be used exclusively for the private sector for strategic purchase and creating a retainer system and not for critical gaps in the funding of government hospitals, the IMA has suggested. In its proposal to the government for consideration in the upcoming Union Budget, the Indian Medical Association (IMA) has said deficit funding is the most important cause behind the lack of penetration of the AB-PMJAY.
If the funding has to be raised to at least the CGHS (Central Government Health Scheme) level, then the amount required is around Rs 1.6 lakh crore, the doctors’ body said. The money being provided now is around Rs 12,000 crore, it said, adding that it is not possible to deficit finance to this level. Insufficient fund allotment is the root cause of the unrealistically low package rates, the IMA said. “AB-PMJAY should remove the unjust exclusion criteria for procedures imposed on private hospitals,” it added.
The IMA also recommended creating a special welfare fund for doctors in general and for the “COVID-19 martyrs” in particular. The doctors’ body said the government should conceive a zero-rate Goods and Services Tax (GST) on healthcare services, allowing the service providers to claim input tax credit. As the GST is not payable on healthcare services, the service providers are not eligible for input tax credit. Enabling this would ensure that input taxes are not added to the cost of the services and provide some relief to patients, the IMA said.
“The healthcare industry is the only industry which does not get input credit because of exemption. Actually, the GST paid by the institutions becomes expenditure and indirectly adds to the cost of treatment. “Either some percentage of the total GST paid by healthcare providers be treated as advance tax or MAT (Minimum Alternative Tax) or the GST paid by them on equipment or otherwise should be reduced to 5 per cent,” it suggested. “The country lost more than 2,000 doctors during the (Covid) pandemic.
Unfortunately, the majority of the families of the deceased doctors did not receive any help other than whatever little the IMA could marshal. “A special welfare fund for doctors in general and for Covid martyrs in particular has to be set up. The nation owes at least this gesture to the medical community,” it said. The IMA has also sought a hike in the healthcare expenditure from the current 1.1 per cent of the Gross Domestic Product (GDP) to 2.5 per cent, as envisaged in the National Health Policy, 2017.
“The health policy 2017 promised GDP in healthcare of 2.5 per cent by 2025. But the increase for healthcare has been negligible and still hovers around 1.1 per cent of GDP,” it said. Of the healthcare expenditure of Rs 89,000 crore for last year, a major chunk of Rs 83,000 crore was revenue expenditure. Capital expenditure was only Rs 5,630 crore. A substantial increase in the capital expenditure is required in the budget to make a meaningful change, the doctors’ body said.
It also said doctors and healthcare organisations be given access to the working capital and preferential funding to ensure that the overall cost of operations is reduced. Benefits should be given to manufacturers of healthcare equipment and consumables under the “Make in India” campaign, the IMA said. It also demanded the revival of the Indian Medical Services, which was abolished in 1947.
“There is an acute need for a drastic but holistic change in the health administration of the country by creating a specialised cadre of health administrators who would be holding the administrative responsibilities,” the doctors’ body said. The structure of the Indian Medical Services would be in the form of a cadre specialised in character for the dispensation of healthcare services, including those in the domain of public health and excluding the domain of medical education in its entirety, like the All India Civil Services emanating out of the All India Services Act, 1951, the IMA said.
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