A Relief Mission

Vipul Shah of Dow Chem and Ameera Shah of Metropolis Healthcare share views on the expectations from chemical and healthcare sectors from the upcoming Union Budget 2012-2013
Vipul Shah, President, CEO & Chairman, Dow Chemical International Pvt Ltd
The $100-billion plus chemical industry in India is one of the critical sectors for our country, which will help sustain the 7 per cent plus GDP growth. The expectations from the forthcoming Union budget are manifold. The setting up chemical parks as charted in the proposed new Chemical Policy, would not only bring investments, satisfy the demands of the domestic market and generate significant employment, but also help sustain the ~ 3 per cent contribution of the chemical sector to the GDP. Announcements regarding ‘Zero duty' on import of chemicals, tax holidays for small and large scale players and self-assessment of imported chemicals would go a long way to provide a much needed fillip to the chemical industry at present. The Zero duty on imports would help facilitate easy availability and higher import of cheaper feedstock as well. The complete removal of Special Additional Duty (SAD) will be a welcome move too. Providing a clearer view of the policy roadmap, including fiscal incentives which will be in sync with the Indian government's own New Manufacturing Policy, implementation of the Goods & Services Tax, rational corporate tax, simplified cess and duty structure would be a big positive for the industry. Additionally, if implemented in 2012, the Good & Service Tax (GST) will bring the much needed relief to the players.

Need For A Public-Pvt Partnership
Ms Ameera Shah, Managing Director and CEO, Metropolis Healthcare Ltd
Basically, I think the same issue that healthcare has always suffered is that we have not been given the interest status in the past. Government has not really provided subsidies or SOP'S for the healthcare sector to expand.

Today, 70 per cent of the healthcare services are provided by the private sector for the country. Unfortunately all this is happening based on the market dynamics, as there are no incentives given to the private sector to expand in rural markets or isolated rural areas.

The healthcare scenario showcases a lot of developments in cities and towns where private players see a lot of opportunities. However, there is very little development happening in the smallest of smaller towns of rural India which I think is going to cause a big problem going forward in the future because today even primary health services of basic standards are not available across our country affecting poor people in a drastic way.

Healthcare service should be considered as a 'basic essential service' provided to all Indians and this has to be driven by the policy of the government but unfortunately we have not seen it happening in the past budget.

Specifically, when it comes to the diagnostic sector, today, we import most of our reagents and technology and at the end, the sad part is that we get taxed on the chemicals and technology that we use and we have to pass it on to the consumer.  The simple thing that the government can do is to eliminate Taxing on the chemicals so that the benefits get passed on to the patients. There was also a lot of hype about including Diagnostics in the service tax bracket and we are quite happy that it was not included in service tax policy and was dropped.  Finally, the government realized that including diagnostic service tax bracket can become very harmful to the patients and consumers across the nation.  I hope they continue to standby on this decision and keep service tax out of the diagnostics services.

Thus in short, listed below are the key developments I would want to see for the diagnostics sector -

- Removing the tax from chemical and technology that are used to save lives of patients.

- Diagnostic companies like Metropolis should be given incentives and subsidies to expand in rural India.

- Government should work closely with national chains to create public-private partnerships model where the private sector can provide services to the public sector to ensure and provide quality and efficient services to people.  I am sure if they tie up with private sector like Metropolis, we could offer much faster turnaround time and quality level and patients could therefore rely on the results that they are getting. They won't have to go to the government hospitals where some of the tests are not available and spend their money on non-standardized services. This results in high cost to the patients and late treatment and sometimes not even good treatment due to wrong diagnosis.