Monday, November 24, 2008

Healthcare: India needs 60,000 crore Rs by 2013!

India needs an investment of up to Rs 60,000 crore (Rs 600 billion) over the next five years to meet demands in the healthcare sector alone, according to a consultancy firm Feedback Ventures.

"Currently, there are 1.5 beds available for every 1,000 people, while the global average stands at 3.3 beds per 1,000 persons.

An investment of Rs 40,000 to Rs 60,000 crore (Rs 400-600 billion) will be required over the next five years to maintain the Indian average looking at the population growth," FeedBack Ventures President (Infrastructure Advisory Division) Monika Sood told reporters in New Delhi.

She said about 80 per cent of the required funding were expected to come from private sector as government alone could not meet it, adding India required an addition of 30,000 beds annually to maintain the current average.

"High gestation period (of 3-4 years at least) of operating a hospital and making profits make the sector difficult for private equity," she added.

Short-term investors would not like to invest in such ventures as it takes at least 3-4 years before the hospital starts making profit. The cost of equipment upgradation, especially for tertiary hospitals is high, Sood said.

However, there has been an increase in the number of private players coming in the healthcare sector either independently or through private public partnership model.

"Private players have realised that the sector is lucrative and have set up hospitals in the metros. The next phase of their growth will come in from the tier II cities like Jaipur, Cochin and Dehradun," she said.

Asked about the impact of the slowdown, Sood said, "There has definitely been an impact as far as investments are concerned. Expansion plans might have been put on hold, but the sector is definitely looking good as healthcare is something not easily affected by recession."



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