The budget passed in parliament last week brought some good news for the healthcare sector, and in turn for radiology services.
Although there were no dramatic duty cuts or grandiose measures, a report by research and consulting firm Frost & Sullivan finds the budget notable in terms of the impetus given to rural health infrastructure and improving access to healthcare.
It provides a "much-needed impetus to improve rural health infrastructure and correct the balance which is currently skewed toward metros and big cities," according to the report by analyst Jayashri Kulkarni.
The 100%-profit-deduction incentive for rural hospitals announced in the budget is expected to provide a positive trigger to private sector participation in rural health infrastructure. This was one concession that the Association of Hospitals lobbied for, according to Frost & Sullivan.
The cost of imports for medical equipment vendors is largely unchanged from 2003, and any reduction in end-user prices is unlikely. "There hasn't been much of budgetary change," says V. Krishna Prasad, president of Bangalore-based Chayagraphics, which manufactures film processors and deals in contrast media, medical equipment, and film accessories.
Another large equipment vendor concurs. "There is nothing significant in this budget," the vendor said referring to an earlier budget that steeply reduced duties on CT equipment. The Indian market consists mostly of imports, except for contrast media. And even with contrast media, nonionic media is imported while ionic media is manufactured locally by some vendors.
The most tangible reaction to the budget seems to be one of relief that no reverses were effected. "The budget was better than expected. At least there was no reversal in the earlier measures that were announced," Krishna Prasad said.
The fear, especially with a new government, is that some of the policies and measures adopted by previous governments will be changed or reversed.
After considering the basic duty, countervailing duty, and cess, the net impact is 1% or lower in most cases. For medical x-ray film and processors, the net impact is 1%. And for CR cassettes, CR equipment, and dry view film, it is less than 1%.
By N. Shivapriya
AuntMinnieIndia.com staff writer
September 3, 2004
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