Support through liquidity infusion for financing of the operating losses: FICCI

It has asked for customs duty / GST exemption on essential medicines, consumables and devices for treatment of COVID patients

FICCI, Liquidity infusion, Operating losses, Customs duty, GST exemption, Essential medicines

The industry body FICCI has pointed out that the hospitals that were already financially fragile over past few years have been stressed with the unplanned investments for COVID-19 preparedness and response; and have seen their revenues topple due to 60-80% decline in patient footfalls, leading to estimated operational losses of 4500 crores per month (at 50% revenues and 35% occupancy levels).

Many small hospitals and nursing homes in tier II & III cities had to down their shutters due to the challenges of liquidity and cash flow.

FICCI has repeatedly recommended to the government for some immediate measures for the health sector to help bring them out of these severe headwinds. Some of these recommendations are:

·         Support through liquidity infusion for financing of the operating losses through short term interest-free/ concessional interest rate loans to address the liquidity gap to the tune of Rs 14,000 -24,000 Cr

·         Unutilised past MAT credit while transitioning to the new Income tax regime

·         Indirect tax reliefs/ exemptions/ waivers like- recoup amount equivalent to ineligible GST credits paid on procurements for a stipulated period

·  Customs duty / GST exemption on essential medicines, consumables and devices for treatment of COVID patients

·         Waiver or reduction of health-cess on all essential medical devices

·         Extension of time for a period of 3 years needs to be provided under the EPCG scheme for fulfilment of existing export obligations for the healthcare sector given that international patient traffic flow has completely stopped

·         At least 50% rebate on the current Commercial Rates of Power currently being paid by hospitals, to ensure sustenance of business