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The Indian healthcare
sector and budget 2003-04
NEW
DELHI: Following is the full text of Indian Finance Minister Jaswant
Singh's address to Parliament while presenting the federal budget
for fiscal 2003-04:
Health
24. With three principal objectives in mind: to contribute to
enhanced national health; to promote India as a global health
destination; and to enable easier access to health facilities to our
disadvantaged citizens, a number of additional measures are now
proposed.
25. In order to encourage private hospitals to either establish new
or to expand existing medical facilities, it is proposed to extend
the benefit of Section 10(23 G) of IT Act to such financial
institutions as provide long-term capital to private hospitals with
100 beds or more.
26. In view of the rapid strides made in R&D in medical
equipment, there is recognisable need to frequently upgrade and
replace the existing equipment with the more 'state of the art'. It
is therefore, proposed to increase the rate of depreciation from the
present 25 per cent to 40 per cent in respect of life saving medical
equipment.
27. To assist citizens with impaired vision, the basic customs and
excise duties on rough ophthalmic blanks shall be reduced from 25 to
5 per cent, and from 16 to 8 per cent, respectively. To help people
give up their addiction to tobacco and its products, excise duty on
Nicotin Polacrilex gum shall be reduced from 16 to 8 per cent.
28. It is also proposed to reduce the customs duty on specified life
saving equipment from 25 per cent to 5 per cent, and also exempt
them from CVD (additional duty of customs). In respect of life
saving equipment already exempt from CVD, it is proposed to exempt
them from excise duty as well, so as to encourage indigenous
manufacturers.
29. A large number of life saving drugs are either exempt from
customs duty or attract a nominal 5 per cent duty. It is proposed to
extend the concessional duty rate of 5 per cent to some more drugs.
Life saving drugs currently attracting nil or 5 per cent customs
duty will also be exempt from excise duty. Basic customs duty on
glucometers and glucometer strips used by diabetics, will be reduced
from 10 per cent to 5 per cent; and they will be exempt from excise
duty as well. Cyclosporine will be exempted from excise duty. This
reduction of excise duty to nil, wherever imports are exempt from
CVD, will certainly make our domestic industry more competitive, as
also better enable them to face the new intellectual property right
regime from 2005.
Health insurance
30. For a large majority of our less advantaged citizens, easy
access to good health services is just not there. In order to
correct this and offer health protection, of some choice, the public
sector general insurance companies have been encouraged to design a
community-based universal health insurance scheme during 2003-04.
Under this scheme, a premium equivalent to Re.1 per day (or Rs.365
per year) for an individual, Rs.1.50 per day for a family of five,
and Rs.2 per day for a family of seven, will entitle eligibility to
get reimbursement of medical expenses up to Rs.30,000 towards
hospitalisation, a cover for death due to accident for Rs.25,000,
and compensation due to loss of earning at the rate of Rs.50 per day
up to a maximum of 15 days. To make the scheme affordable to BPL
families, the Government has decided to contribute Rs.100 per year
towards their annual premium. Full details will be publicized
shortly.
31. I request Hon'ble Members to give this scheme the widest
possible coverage in their constituencies. The benefits Sir, are
real. 32. In the first phase, at least an additional 50 lakh BPL
families will be covered during 2003-04.
Disabled and
handicapped
33. The Government is committed to providing equal opportunities,
protection of rights, and all-round development of persons with
disabilities. A number of initiatives have already been taken in
this regard.
34. Now, for income tax purposes, it is proposed that the physically
handicapped or persons with such dependents be entitled to a
deduction for permanent physical disability of Rs.50,000, and an
enhanced deduction of Rs.75,000 in case of severe disability.
35. I also propose to reduce the customs duty on hearing aids,
crutches, wheel chairs, walking frames, tricycles, braillers and
artificial limbs to 5 per cent without Special Additional Duty
(SAD). They will be exempt from CVD, and the domestic manufacturers
will also be exempt from excise duty. I also propose to reduce the
customs duty on parts of hearing aids and wheel chairs to 5 per cent
without CVD and SAD.
36. The Government will establish a college of rehabilitation
sciences at Gwalior, and a national institute for empowerment of
persons with multiple disabilities at Chennai.
Research and development
92.
Hon'ble members, as I have already said, knowledge is industry; and
this is particularly so when our imperative is to be the best, in
all aspects in general, but particularly in product design and
quality. To encourage R&D, it is proposed to extend the tax
holiday to R&D companies established up to March 31, 2004.
Pharmaceuticals
101. All the benefits listed under health-care will also promote
pharmaceutical industry. Besides, income tax concessions to
pharmaceuticals, bio-technology and information technology are at
par. All drugs and materials imported or produced domestically for
clinical trials will be exempt from customs and excise duties.
Customs duty on import of Reference Standards by the industry has
been reduced from 25 per cent to 5 per cent.
Bio-technology
107. Biotech is our today's sunrise, tomorrow's showpiece industry.
The Government, to facilitate units engaged in R&D in
biotechnology and the pharmaceuticals sector, has decided to remove
the existing restriction of minimum export obligation of Rs.20 crore
for availing exemption from customs duty for specified equipments.
Further, the restriction of full exemption being limited to only 1
per cent of last year's export turnover is also lifted for R&D
units. Moreover, in respect of R&D units with manufacturing
facilities, the benefit of full customs duty exemption for specified
equipment will also be available for their manufacturing activity to
the extent of 25 per cent of the previous year's export turnover.
Promoting India: India Development
Initiative
117. An initiative to promote India as both a production centre and
an investment destination, called 'India Development Initiative',
shall be established in the Ministry of Finance, with an allocation
of Rs.200 crore for 2003-04. This initiative will also leverage and
promote our strategic economic interests abroad.
(Ref:
The Economic Times, March 02, 2003)
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