Nithya Subramanian

New Delhi, Feb. 7

THE Finance Ministry is not in favour of levying an additional 2 per cent cess as proposed in the draft Pharmaceutical Policy to fund the healthcare needs of the poor in the country.

At a high-level meeting chaired by the Cabinet Secretary, Mr B.K. Chaturvedi, officials from North Block were of the view that levying another cess would not go down well as the tax payer is already being burdened with a 2 per cent education cess, a road cess, tobacco cess among others.

According to highly placed sources, besides Budgetary support, the Finance Ministry is keen that alternate funding mechanisms be examined. "The Health Ministry has been asked to look into the issue and come up with suggestions," said sources.

The Health Ministry had also supported the proposal for levying a health cess put forward by the Department of Chemicals and Petrochemicals.

The draft Pharma Policy has said that Rs 6,500 crore would be required to fund various schemes and "in case there is difficulty in levying of health cess, the Government may provide funds amounting to Rs 6,500 crore which is equivalent to 0.02 per cent of the GDP out of the general Budget."

Currently only 0.9 per cent of GDP is being spent on health and as per the National Common Minimum Programme this would have to be raised to 2 to 3 per cent of GDP.

It had said that the money would be spent primarily on schemes meant for the poor people and would be used to fund supply of medicines through the Rashtriya Swasthya Bima Yojana, to fund the subsidy scheme for anti-cancer drugs, to expand the anti-retroviral treatment centres for additional AIDS patients throughout the country among others.

Meanwhile, a section of the industry under the Indian Pharmaceutical Alliance has said that the funds raised should be used for creating infrastructure instead of spending on consumption.

It has recommended setting up more AIIMS like institutions in each State, establishing cancer treatment centres in each district, strengthening the primary healthy centres and putting in place more institutions like the National Institute of Pharmaceutical Education and Research.

(This article was published in the Business Line print edition dated February 8, 2006)
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