The Union Budget is set to be presented by Finance Minister Nirmala Sitharaman on July 23, 2024. Industry experts from the healthcare sector reflect on the progress made thus far, highlight the shortcomings and present their views and expectations from Modi 3.0.
Gautam Khanna, CEO, P D Hinduja Hospital and Medical Research Centre, Mumbai
“India has demonstrated good growth and progress in healthcare with government’s support and industry’s collaborative efforts. However, the healthcare needs of the people of India are as diverse as the country itself, and the challenges of affordability and accessibility remain paramount. The upcoming budget should reflect these needs and focus on further strengthening India’s healthcare resources, infrastructure and technological prowess. To achieve this and enhance the quality and access of healthcare services in India, we request the Finance Minister to allocate the healthcare budget to the tune of 2.5-3.5 per cent of GDP.
India’s elderly population is expected to reach a staggering 347 million by 2050 (1). This demographic shift is a societal transformation of unparalleled magnitude with far-reaching implications particularly an increased pressure on the existing healthcare systems. The government’s consideration of comprehensive policy measures for senior care, encompassing health, financial, social, and digital support, is commendable and timely. We strongly support the proposal to provide health benefits to all individuals over 60 years of age, with a contributory scheme of coverage up to Rs 5 lakh annually. The potential expansion of the Ayushman Bharat PM Jan Arogya Yojana to cover all senior citizens, including non-medical and in-home care needs, represents a holistic approach to elderly care that we hope to see implemented. We would also like the government to bring in a PMJAY equivalent scheme for the middle class too.
The private sector is expanding rapidly, to bridge the accessibility gap. This should be encouraged with depreciation allowances for investments in diagnostic infrastructure, incentives for infrastructure development, and improving ease of doing business for the private sector in all cities. Introducing either Zero rating GST to the healthcare sector with Input Tax credit or bringing the healthcare sector under 5 per cent GST with Input Tax credit will help. The private sector should be viewed as a partner by the government to bring healthcare benefits to the masses.
The previous budget’s substantial commitment to Research and Development with a Rs 1 lakh crore corpus and a 50-year interest-free loan for sunrise sectors, can be instrumental in encouraging private players to scale up healthcare research and innovation, especially in the start-up domain.
Digital healthcare with Artificial intelligence and Machine Learning is already playing an important part to bridge the accessibility and affordability gap. Such innovative healthcare delivery models, with the potential to scale, can be encouraged with tax incentives on technology, developing an ecosystem to support such initiatives and public-private partnerships.
This budget presents an opportunity to build on the progress made and further solidify India’s position as a leader in healthcare delivery, innovation, accessibility, and medical technology.”
Joy Chakraborty, COO, P D Hinduja Hospital and Medical Research Centre
“As we approach the upcoming Budget, it’s crucial to reflect on our progress and chart a course for strengthening India’s healthcare system. The previous budget laid a strong foundation by emphasising the establishment of new medical colleges and optimising existing facilities, demonstrating the government’s commitment to improving medical education quality and accessibility.
Building on this foundation, we must now focus on harnessing the power of innovation and technology to transform our healthcare landscape. India’s growing middle class, with increased disposable income and healthcare awareness, is driving demand for high-quality healthcare products and services. This demographic shift, coupled with initiatives like Startup India, is fostering an entrepreneurial spirit that’s reshaping our medical technology sector.
The health tech market in India is poised for exponential growth, projected to reach ~$35 billion by 2030 (2). As this ecosystem matures, both startups and incumbents are bringing unique strengths to create value for patients. The previous budget’s commitment to R&D, with its Rs 1 lakh crore corpus and 50-year interest-free loan, has been instrumental in spurring private sector involvement and innovation.
To stimulate growth and innovation in healthcare, we recommend a comprehensive policy reform approach. This includes expanding financial support for diagnostic infrastructure investments and implementing targeted tax incentives. We propose either zero-rating GST for healthcare with an input tax credit or bringing the sector under a 5 per cent GST bracket. These measures would ease financial burdens on providers and boost growth in medical technology and innovative delivery models. By creating a favourable business environment, we can accelerate healthcare transformation, encouraging investments in cutting-edge technologies and services. Such reforms are crucial for enhancing healthcare quality and accessibility while fostering a robust innovation ecosystem across India.
The post-COVID-19 era has seen a higher focus on preventive care and health management, coinciding with rising lifestyle disease prevalence in urban areas. To address these challenges, we recommend focusing on public-private partnerships (PPP) and a more comprehensive reform of medical education to ensure our professionals are trained in the latest techniques.
By expanding these commitments in the forthcoming budget, we can create a robust ecosystem that encourages innovation, enhances domestic capabilities, and improves healthcare delivery across the nation. This budget presents an opportunity to leverage digital healthcare, including AI and machine learning, to make quality healthcare more accessible and affordable for all Indians.”
References:
- https://india.unfpa.org/en/news/indias-ageing-population-why-it-matters-more-ever#:~:text=The%20per%20cent20current%20per%20cent20elderly%20per%20cent20population%20per%20cent20of,a%20per%20cent20complex%20per%20cent20and%20per%20cent20intricate%20per%20cent20issue.
- https://www.bcg.com/publications/2023/india-a-digital-pill-for-revolutionizing-healthcare