It is a measure of the clout of the prosperous private sector healthcare industry in India that not only did Union finance minister Pranab Mukherjee succumb to the crocodile tears of all those who decried his so-called ‘misery tax’ but elected representatives of the people in Parliament thumped their desks in mock concern for the common man and most of the media hailed this act of temporary benevolence. Temporary, because Mr Mukherjee has made it be known that the 5 per cent service tax on private hospitals of a certain category that was introduced by him through this year’s annual budget was part of the time table of transition to a generalised goods and services (GST) tax. So, when a GST comes, this ‘misery tax’ will have to return. Hand it to the millionaire entrepreneur-doctors that they were so very successful in their campaign, first having smartly dubbed the proposal a ‘misery tax’. While Apollo Hospitals’ much celebrated founder Pratap C Reddy claimed that this reversal of policy would enable the healthcare industry to “serve the nation”, it is the nation and the tax payer that have been serving business interests in healthcare with tax breaks and subsidies. Curiously, Mr Mukherjee also gave away some tax breaks that would benefit manufacturers and buyers of Mercedes-Benz cars! This too would be hailed by many doctors and editors!
The government made good use of the opportunity provided by an opposition walkout to get the finance bill passed, and also used the occasion to place on the table of the House, new and important economic legislative agenda that the government can take up when Parliament reconvenes. Tabling the GST bill, even if a sub-optimal version, was a good idea. It is better to take even a tentative step forward than no step at all. If there are issues that need sorting out, they can always be addressed later. Next time Parliament meets, not only would the Left Front be on a back foot, having lost power in its key bastions, but Prime Minister Manmohan Singh would be celebrating the 20th anniversary of the historic economic reforms of July 1991. This would be an excellent occasion to have the pending bills on insurance, pensions funds and banking sector reform passed. On the occasion of the 20th anniversary of the 1991 reforms, a new wave of forward-looking policy reform should be launched. The new lease of life that the United Progressive Alliance is likely to get from the assembly elections, winning a majority of them (if not all), should help boost the government’s morale and energise it to take some pro-active steps on the policy front to enthuse the animal spirits of Indian enterprise.