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Budget 2015: 5 more AIIMS, tax exemption limit in health care premium increased

The health care industry across the country has welcomed the budget proposals which include setting up of five new All India Institutes of Medical Sciences (AIIMS) and increasing tax exemption limits for health insurance cover.

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The health care industry across the country has welcomed the budget proposals which include setting up of five new All India Institutes of Medical Sciences (AIIMS) and increasing tax exemption limits for health insurance cover.

In his budget speech, finance minister Arun Jaitley said, "In 2015-16 fiscal, I propose to set up AIIMS in J&K, Punjab, Tamil Nadu, Himachal Pradesh and Assam." Jaitley also proposed to set up an AIIMS-like institution in Bihar, and three National Institutes of Pharmaceutical Education and Research in Maharashtra, Rajasthan, and Chhattisgarh.

Nilaya Varma, head of health care sector, KPMG in India, said, "New AIIMS would strengthen the tertiary care infrastructure in these states. However, the pressing need is to strengthen the primary and secondary care network, if we have to create better health outcomes."

The government made an allocation of Rs33,152 crore for the health sector and announced Rs150 crore towards Atal Innovation Mission, an innovation promotion platform involving academics, entrepreneurs and researchers.

Ameera Shah, MD & CEO, Metropolis Healthcare, said, "The allocated health care budget for this year is Rs33,152 crore. In 2014-15, it was Rs39,238 crore, which was slashed by 20% in December. This does not send the right message at a time when we are talking about proportionately increasing the budget in terms of GDP."

However, the government increased the limit of deduction in health insurance premium from Rs15,000 to Rs25,000. For senior citizens, the limit will stand at Rs30,000, up from Rs20,000.

But there is nothing in the budget for the pharma sector. "Overall, the budget has little measures specific to support pharma industry growth. There have been no initiatives announced to boost the bulk drugs industry, which is facing stiff competition from China," said Nitin Goel, MD, IMS Health South Asia.

The increase in service tax to 14% from 12.36% will have an adverse impact on patients and hospitals.

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