Wednesday, March 9, 2011

PM's doctor opposes healthcare tax

Union finance minister Pranab Mukherjee's proposal to impose 5% service tax on healthcare now faces stiff resistance from Prime Minister Manmohan Singh's surgeon Dr Ramakant Panda.

Dr Panda, who heads Asian Health Information institute in Mumbai and is one of India's best known cardio-vascular thoracic surgeon, has written a letter to Mukherjee, asking for a rollback of the proposal.

He said at present in India, 64 years after independence, the number of beds, nurses and doctors per 1,000 population is among the lowest in the world. According to Dr Panda, India is not even at par with sub-Saharan countries.

"We have 0.8 beds per 1,000 people. In in sub-Saharan countries, it is 1 per 1,000. In China, it is 3 per 1,000 and in the US it is 7 to 8 per 1,000. The hospital infrastructure, equipment, doctors and nurses that we have in this country is much less than what we need," he wrote.

He adds, "There is a huge demand-supply gap and we need to fill this gap. In the budget, you have proposed to levy a 10% service tax, with an abatement of 50%, on treatment carried out at hospitals with 25 or more beds with central air conditioning and diagnostic test services. This levy would have a negative impact across the healthcare spectrum. This comes at a time when the healthcare sector is already bearing the brunt of an inflationary spiral."

Dr Panda insists that air-conditioning in hospitals is an essential need, and not a luxury. The guidelines laid down by the National Accreditation Board for hospitals do not provide accreditation to hospitals without central air-conditioning as split or window air-conditioning increases the risk of infection in the hospital. "The service tax measure would deter hospitals from going in for central air-conditioning, leading to an increase in the already high infection rates in the hospitals," he added.



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