Immediate Support required for the Hospitals & Healthcare Facilities
As we battle the Covid – 19 crises, Mr. Hemant Kanoria, Chairman of Srei Infrastructure Finance Ltd via a letter to the Hon’ble Prime Minister, Shri Narendra Modi, has suggested the following measures to support the healthcare ecosystem. The healthcare industry has been at the forefront of our battle against COVID-19 under your able leadership. The Braveheart healthcare professionals and all support staff are working relentlessly amidst various adversities and limitations and are putting their own lives at risk to contain the spread of COVID-19. We salute their courage, dedication, determination, and fighting spirit. The government’s brainchild Ayushman Bharat, which is the world’s largest healthcare project, is supporting millions of poor Indians at this time of distress. However, the present crisis has highlighted many gaps in India’s healthcare system which the Government needs to take note of and address.
This necessitates massive revitalization of the healthcare ecosystem. First, to ensure that the existing hospitals and healthcare facilities do not become bankrupt. Second, to increase the number of hospitals, nursing homes, healthcare centers, diagnostic centers, etc., there is also an urgent need to create the capacity and infrastructure necessary for expanding the reach of telemedicine and to ramp up the training facilities for healthcare professionals. In addition, a ‘Make in India’ drive for medical equipment will also be useful in meeting domestic demand as well as demand from neighboring nations.
Thus, this sector calls for a targeted stimulus package covering the following:
- For all existing healthcare entities (hospitals, nursing homes, diagnostic centers, healthcare training centers, etc.) which are finding it difficult to service their loans due to the disruption in cash flows due to the lockdown, banks, NBFC-s and FI-s should restructure such loans based on the future cash flows and value of assets and collateral, while keeping assets classified as ‘standard assets’
- Banks, NBFC-s and FI-s be instructed to classify their loans to healthcare facilities as ‘priority sector lending’
- Banks, NBFC-s and FI-s be instructed to provide additional working capital and term loan facilities to healthcare entities within the next 30 days
- Any investment or contribution made by corporates to hospitals should be treated as Corporate Social Responsibility (CSR) spending under Section 135 of the Companies Act and all companies should be encouraged to contribute to the maximum extent under this clause to the hospitals
- Allow banks, NBFC-s and FI-s to convert their loans into CSR contribution under Section 135 of the Companies Act
- Central and state governments should proactively release all payments which are due in various government health schemes to hospitals and diagnostic centers. This will infuse the much-needed liquidity which will help them in fighting this pandemic
- GST rate on medical equipment be reduced from 12% to 5% with immediate effect
- Import duty on medical equipment needed for fighting this pandemic (e.g. ventilator, monitor, testing machines, etc.) be made NIL for the next 6 months to ramp up the infrastructure quickly
Building a vibrant healthcare ecosystem will not only equip India to deal with any future medical emergency better, but it will also help in shaping a healthy and robust India, generating more employment, emerging as a regional hub for medical expertise and equipment capability.