Need for PPP in healthcare delivery and education

Public-private partnership or PPP is what Mahad Narayanamoni, Partner, Corporate Finance, Grant Thornton, considers should be the top priority of the forthcoming Budget. And, in the set of ‘nice-to-haves’ that he shares with Business Line over the email, as the head of his firm’s healthcare practice, tax benefits and FDI (foreign direct investment) relaxation do feature.

Excerpts from the interview.

The must-haves.

1. There is an immediate need for a policy and budgetary allocation for PPP in healthcare delivery and education. This should significantly increase access to healthcare and improve outcomes.

2. The coverage of national health insurance scheme (such as RSBY or the Rashtriya Swasthya Bima Yojana) needs to be increased. Further, positive features of the schemes run in states such as Andhra Pradesh and Tamil Nadu may be incorporated into the national health insurance scheme.

3. The Indian medical equipment and medical devices sector is in dire need of fiscal and even financial support. Benefits such as tax incentives and land allocation should enable this sector to start competing with imported products and thereby facilitate reduction in cost of delivery of healthcare. Allocation of funds for direct financial support to early-stage companies in this sector will enable development of indigenous products and making India self-sufficient in this critical healthcare segment.

4. The Government needs to actively consider revamping the medical education system, including the need to have an MBBS degree before being able to practise, with a view to increasing the availability of medical practitioners in rural areas.

The nice-to-haves.

1. While healthcare is defined as infrastructure, companies with a desire to provide hospital infrastructure on a turnkey basis are constrained by the FDI norms (such as, a minimum built-up area of 5,00,000 sq. ft. for a hospital). At 5,00,000 sq.ft., the hospital size will be in excess of 500 beds; the hospital then needs to be located in high-paying urban areas to generate returns. Relaxing the FDI policy associated with this will significantly boost investments in healthcare from an infrastructure perspective and enable smaller operators also to thrive.

2. The Government should consider providing tax benefits for hospitals in tier-1 and tier-2 towns as well, similar to benefits available to hospitals in rural areas. Availability of quality healthcare is an issue even in several tier-1 and tier-2 towns and not just the rural areas.

3. The Government may consider improving efficiency of rural healthcare delivery by promoting tele-medicine on a PPP basis and enabling the adoption of villages by corporate/ large government hospitals.

On related areas where policy changes can impact the healthcare sector.

1. Allocation of spend to infrastructure-building and additional sops to the infrastructure sector should have a positive indirect impact on healthcare as well.

2. Increasing the FDI limit for the insurance sector should have a significant positive impact on healthcare spend.

3. Any relaxations in the FDI policy for higher education will have a major positive impact on availability of qualified practitioners and thereby quantity and quality of care in the medium-term.


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Printable version | Feb 18, 2020 11:55:49 AM |

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