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Healthcare: Priority status, training needed

The key demands of the healthcare industry include priority sector status, more flexible norms for forays into Tier II, Tier III cities, towns and beyond and skill development measures.

"Being ignored is definitely disappointing," says Sangita Reddy, executive director of operations at Apollo Hospitals.  She's talking about the Indian healthcare sector's five-year-old demand that healthcare gets the priority sector status. This year too, she tells BT, the request is being renewed before the finance minister in the hope that the Union budget will give the sector this long pending recognition. "Even if we do not get tax sops, the healthcare players in India will at least get access to low interest funds if it is treated as a priority sector like infrastructure." This, she says, is important as healthcare is a critical space and one that involves long gestation and capital intensive ventures.

The other need relates to foray into the country's tier II, tier III cities, towns and rural areas. In the 2008-09 Budget, the government had announced a five-year income tax holiday to all new hospital projects with growth plans in smaller towns or tier II cities. But that hasn't helped. Players like Vaatsalya Healthcare, a hospital chain that focuses only on opening facilities in tier II and tier III cities and towns, haven't been able to reap the benefits, says Dr Ashwin Naik, founder of Vaatsalya Healthcare, in part because the rules governing the break are very restrictive.  For example, the hospitals must have at least 100 beds.

"There should be a blanket approval for all serious investments in this space without any restriction other than through creation of systems and mechanisms to audit quality in these locations," says Naik.

Reddy agrees. "Instead of 100 beds, it could be just 50 beds or so."

She also adds one more incentive the healthcare sector is hoping for in this year's budget: "A special announcement on skill development." India's rural areas - and to a lesser extent, other parts of the country - are in critical need of trained doctors, nurses and paramedical staff.  The government could either allot more funds for training nurses and paramedics or evolve a PPP (public-private  participation) model that links government hospitals to private training institutions.

Key Demands

1. Priority sector status for healthcare

2. More flexible norms for forays into Tier II, Tier III cities, towns and beyond

3. Skill development measures

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