NITI Aayog suggests 100% IT exemption for donations

NITI Aayog, set up by the government for transforming India’s development agenda, submits its report on the not-for-profit hospital model in India. It has proposed a 100 per cent exemption for donations towards such not-for-profit institutions to promote this sector.

The not-for-profit hospitals being a potential remedy to meet the challenge of unavailability and unaffordability of healthcare in India, are studied to know their dynamics of operations in the country. The study suggests short term and long-term policy interventions for boosting this sector. 

It proposes the government for the provision of lost cost working capital requirements. The lower interest rates would help the hospitals in meeting the operational needs through adequate cash flows. It also emphasised on clearance of long-pending reimbursements for the treatments of government scheme beneficiaries. The timely disbursement of funds will enable the smooth functioning of the operations.

NITI Aayog further proposes tax exemption on membership fees paid to increase the memberships at cooperative trust hospitals. The higher membership will expand its infrastructure development and enable them to achieve the goal of self-sufficiency through self-participation.

The study report of NITI Aayog also proposes to identify hospitals by formulating objective criteria. Along with the identification, it suggests developing mechanisms for ranking hospitals on the performance index. For example, it can rank based on the key indicators such as volume of hospital services utilised, charity work done, operational efficiency, etc. Furthermore, it insists on highlighting the not-for-profit hospitals in the public domain by creating a national portal or directory.

The report highlights the challenges faced by the not-for-profit hospitals that are critical to their operations and sustenance. The challenges include:

• Recruitment and retention of doctors and staff.
• Delayed reimbursements for treatment of government health scheme beneficiaries.
• External dependencies for infrastructure and equipment expansions.
• Regulatory challenges faced in remote areas.

Hence, it proposes to leverage the expertise of high performing hospitals in public-private partnership (PPP) models for professionally managing PHCs, other government facilities and PSU hospitals. Also, it suggests customising the mandatory staffing requirements by the regulations such as the Clinical Establishments Act, PNDT Act, and blood bank to make these hospitals less cumbersome. Incentivising and motivating the super-specialist doctors to engage in hospitals situated in remote areas to mitigate workforce scarcity challenges.

Hence, this study will facilitate policymakers in deciding how they can help this sector grow and penetrate society’s unreached sections. 

For any clarifications/feedback on the topic, please contact the writer at namita.shah@cleartax.in