Niti Aayog moots 100% I-T exemption for donations to not-for-profit hospitals

New Delhi: After some years of its suggestion to revamp district healthcare centres on a public-private partnership model, the government's think tank Niti Aayog has mooted 100 per cent income tax exemption for donations and provision of working capital loans with lower interest rates for not-for-profit hospitals to strengthen healthcare services in the country.

In a report titled 'Not-for-Profit Hospital Model in India', the Aayog also pitched for involving high performing hospitals in public-private partnership (PPP) models for managing primary health care (PHCs), operations of government facilities and PSU hospitals.

"Income-tax exemption could be increased from the current 50 per cent exemption to 100 per cent exemption for philanthropy toward the identified not-for-profit hospitals. This could be a catalyst in channelising the much-needed funds to deserving hospitals," the report said.

According to the report, the government can consider the provision of working capital loans with lower interest rates, which would be more financially viable for not-for-profit hospitals and would assist in adequate cash flows during times of need.

The report also pointed out that most of the not-for-profit hospitals reported long-pending reimbursements for the treatment of government scheme beneficiaries, which remain uncleared despite persistent follow-ups. "The timely release of these funds can be a substantial boost to their working capital for operations," it said. Noting that the not-for-profit hospitals currently account for only a miniscule share of hospitalisation cases, the report said that public hospitals that offer healthcare at negligible cost are overstretched. The burden of healthcare provision shifts to private hospitals, which generally offer healthcare at a higher cost to the patient, as they must sustain themselves, it added.