GST 2.0 and Healthcare: A Fiscal Push for Affordability and Prevention
UPSC Relevance
Prelims: Indian Economy (GST, Taxation, Social Sector); Social Development (Public Health, Nutrition, Insurance); Government Policies & Schemes.
Mains:
General Studies Paper 2 (Health & Governance): Issues relating to development and management of Social Sector/Services relating to Health; Government policies and interventions.
General Studies Paper 3 (Economy): Government Budgeting; Inclusive growth; Impact of fiscal policy on social sector goals.
Key Highlights from the News
GST 2.0 reforms are a major step aimed at making the healthcare sector in India more accessible and affordable.
Key Changes:
18% GST on individual health and life insurance premiums completely waived (made 0%).
Tax on life-saving drugs reduced to 0%, and most other medicines and medical devices reduced to 5%.
Major treatment services in hospitals will continue to be exempt from GST.
To promote preventive health, the tax on gyms, fitness centers, and wellness services reduced from 18% to 5%.
Meanwhile, to reduce unhealthy consumption, sugary drinks have been moved to a higher tax slab of 40%.
These reforms are expected to increase insurance penetration, reduce treatment costs, and thereby help achieve the goal of Universal Health Coverage.
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