The Honorable Minister for Finance Shri.Pranab Kumar Mukharjee presented the Union Budget for 2011-12 in parliament today. Here is a snap shot of the major highlights of his budget speech regarding the Health Sector in India.
Budget 2011-12 and Health Sector
Major highlights for Department of Health and Family Welfare
The Plan Allocations to Department of Health and Family Welfare stepped up in 2011-12 by 20 per cent to Rs.26,760 crore.
Health Insurance
The Rashtriya Swasthya Bima Yojana has emerged as an effective instrument for providing a basic health cover to poor and marginal workers. It is now being extended to MGNREGA beneficiaries, beedi workers and others. In 2011-12, it is proposed to further extend this scheme to cover unorganized sector workers in hazardous mining and associated industries like slate and slate pencil, dolomite, mica and asbestos etc.
Service Taxes
Service tax was imposed in 2010-11 on health check up or treatment. This levy has resulted in differential treatment between persons who make payments themselves and others where payments are made by an insurance company or a business entity.This will be replaced with a tax on all services provided by hospitals with 25 or more beds that have the facility of central air-conditioning. Though the tax is on high- end treatment, there will be an abatement of 50 per cent so that the actual burden is kept at 5 per cent of the value of service. It is also proposed to extend the levy to diagnostic tests of all kinds with the same rate of abatement. However, all Government hospitals shall be outside this levy.