Kochi: A report prepared under the Modernising Government and Fiscal Reforms in Kerala Programme (MGP) has proposed levying health tax from residents by the respective gram panchayats.

MGP is funded by the Rs 1,800-crore loan that the state government is availing of from the Asian Development Bank (ADB).

Pointing out that the proposal will be given a concrete shape only after it is discussed and approved at various levels by the concerned authorities, sources say the proposed tax will be levied to cover the expenses involved in running government hospitals.

The objective of levying this tax will be to give financial autonomy to government hospitals. To make this possible, the MGP steering committee headed by the state chief secretary has recommended amending the Panchayat Act.

As per the proposal, though the health tax can be levied from every family, people living below the poverty line should be exempted from it. The taxes levied under this programme can also be utilised to create a health fund. All the expenses related to the appointment of doctors on temporary or contract basis as well as for the purchase and maintenance of equipment in government hospitals can be met from this fund.

The committee has proposed finalising the mode of collection and size of this fund by December 2003 and bringing in the amendment to the Act by June 2004. Pointing out that there could be stiff opposition to this proposal from various quarters, the committee has suggested conducting an awareness campaign among the public.

Suggesting drastic reforms in the health sector, the committee has proposed computerisation of facilities as well as centralisation of collection and distribution of drugs so as to ensure quality. A special committee should also be set up for keeping abreast of the developments taking place in the health sector, it added.