Free Flowing Funds!

The healthcare sector in India is attracting investments like never before.


Partly influenced by rising opportunities in medical tourism and partly enthused by the growing domestic demand for high-end medicare services, hopes are flying high, and the sector is set for an overhaul, which was due for a long while.

In ’07-’08 alone, nearly US$ 400 million was pumped into this sector by a bunch of private equity firms. On top of it, there are corporate and industrial investors bringing big value capital to revamp this hitherto laggard sector of the economy.

Going by industry forecasts, the healthcare sector will receive private investments to the tune of US$ 5 billion over the next 4-5 years. Although a bulk of this investment is expected to flow into metro centres, some portion might find its way to non-metro towns and cities at least after the recent grant of five year tax holiday for new facilities in tier II & III cities.


The government is also trying to catch up with the trend. Union Budget ’08-’09 has hiked healthcare allocations by 15% over last year, amounting to a total outlay of INR 16,534 crores.

Following closely on this trend, medical technology and healthcare IT companies are also burning their boosters. With foreign and domestic firms coming into the foray and vying for the opportunity lying ahead – competition is getting stiffer.

While the age-old legacy of price sensitiveness continues to prevail, the healthcare industry (like many others) has lately acquired good tastes of global competitiveness and high quality. Thus, manufacturers of medical equipments are left with no choice but to find ways of delivering world-class products, at ‘Indian prices’. This trend is strongly reflected in the setting up of local manufacturing base for many foreign and domestic companies alike.

Sparks are flying in the insurance sector as well. With a host of private and public players entering the health insurance space, the ‘provider-payer-patient’ triangle is slowly reeling out of its long drawn overload on the last ‘p’. Some proactive measures from the government are also helping in this direction. For instance, recently announced tax benefit scheme for paying medical insurance premium of elderly parents and introduction of Rashtriya Swathya Bima Yojana having health insurance coverage up to INR 30,000 for workers and their families in the unorganised sectors is commendable. However, it’s a long way that lies ahead, as the average health insurance coverage in India stands at a mere 4% of the population.

Get a deeper insight inside this issue.

Follow and connect with us on Facebook, Twitter, LinkedIn, Elets video

Eletsonline News

Follow us on

Most Popular

200000+ Subscribers read it every day.
Subscribe Newsletter
To Top