Growing at the rate of 15 per cent CAGR, the Indian healthcare industry is set to almost double by the year 2015, growing from $60 billion to $120 billion. This growth is remarkable for any industry, which definitely calls for more attention from the policy makers to the healthcare industry. This magnanimous growth and market dynamics are possibly the only major drivers for the healthcare industry. The support from government in the form of tax relaxations and subsidies is rather limited. In the last year we did witness a welcome change of tax exemption for preventive diagnostic tests below Rs 5000, which would have a positive impact on the demand side of the diagnostic market. However many more interventions are needed on the supply side so as to reduce the costs of delivering diagnostic tests. Currently the taxation levied on necessary chemicals and technology increase the test costs, thereby making it inaccessible to most people. Some relief can be sought from the last year’s reduction of duties on raw materials used in medical devices, but its benefit on diagnostics per se would be much limited. If the costs for life saving diagnostic tests have to be brought down and its benefits are to trickle down to the common man, reduction on taxation of lab chemicals would have a much more visible effect.
Mindful of the fact that diagnostics is the first step towards effective treatment, it is important that all our national health programmes recognise the importance of quality diagnostics. According an explicit position to diagnostics was lacking even in the recent 12th Five Year Plan. In order to ensure that quality diagnostics reach people through programme verticals; budgetary allocations to diagnostics is much needed. If timely diagnostics is missed, none of the vertical programmes meant for either chronic or infectious diseases, would be able to detect cases early. In the light of this fact, it would help to allocate budgets which are ear-marked for spending on diagnostics through all the disease vertical programmes. Additionally, the functionaries should be made accountable for proper utilisation of such allocated resources.