PERHAPS the single worst idea in this year's budget in India is to slap a 5 percent service tax on healthcare, which will put affordable medical treatement further beyond the reach of the common man. It is unfortunate that the contribution of the healthcare sector to the overall growth and development of the economy is grossly underestimated in India, writes the Times of India in its editorial. Excerpts: Government spending on healthcare – roughly around one percent of the GDP – is woefully inadequate and even lower than countries in sub-Saharan Africa. Disappointingly, the 2011-12 budget did nothing to correct the perception. Worse, the proposed service tax on healthcare pushes affordable medical treatment further beyond the reach of the common man. The World Bank estimates that around 24 million people in India are pushed into poverty each year due to health expenditures. The public healthcare infrastructure in the country hardly inspires confidence. India has just 90 beds per 1,00,000 people as opposed to a world average of 270 beds. There are only 60 doctors and 130 nurses per 1,00,000 people against world averages of 140 and 280 respectively. Around 80 percent of Indians finance their health bills from their own pockets. With government hospitals and clinics poorly resourced, the private healthcare sector is crucial to providing medical facilities to the masses. It is a misconception that centrally air-conditioned hospitals with 25 beds or more – on which the levy is proposed – cater to a rich clientele alone. Air-conditioning is a minimum prerequisite for operating an ICU, operation theater or a blood bank. If the proposed tax is enforced, hospitals will have no other option but to pass on the burden to patients. With rural healthcare already in a shambles, the tax may disincentivize poor patients from seeking formal medical care. The budgetary allocation for various national disease programs has also been slashed by 14 percent over the last two years. This seriously jeopardizes efforts to fight diseases such as tuberculosis and vector-borne illnesses such as malaria and dengue. In the circumstances, the government must stop treating the private healthcare sector as a cash cow. __
