Service Tax on Health Sector

Dr. Narender Saini, President Delhi Medical Association said that DMA strongly oppose 5% Service Tax on health care industry as it will further increase the cost of medical treatment to a common man. At present more than 70% of health services are provided by the private sector, though the primary responsibility of providing the medical treatment is of the government. Already the services in private sector are very high because of so many taxes on this sector. Due to further increase in the form of service tax many people will not be able to afford their treatment.
Prevention is better than cure. Our finance minister in this budget has put service tax on preventive health checkup also. DMA condemn this proposal. He further added that in develop world government spend, more than 15% of GDP for health services. While in India where infectious diseases are in huge numbers our health budget is just 1% GDP. It is worthwhile to note that our GDP is much smaller as compared to USA/UK etc. In this budget, our Finance Minister has proposed a health sector outlay for 2011-12 for just Rs.26,760 crores, a raise of 20% over the previous year. But it is no increase if we take inflation into account. Medical professionals were expecting that finance minister will announce subsidies like given to IT industry, for those who want to serve in rural population. We demand tax holidays and soft loan to be given to private sector who wants to work in villages. If such kind of incentives are given to doctors, they will be willing to work in rural areas. There is no announcement of opening of more new hospitals/medical colleges.
DMA demands:
1. The introduction of 5% Service Tax of health care sector be scrapped with immediate effect.
2. Increase in the health budget as health is a wealth of nation.
3. Tax holidays and soft loan for doctors who want to serve in villages.
4. Opening of more medical colleges and hospitals in rural areas.
5. Avenues may be explored to ensure the growth of health care sector.
6. Improvement in the infrastructure for doctors serving in the public sector