Budget 2023: What does the industry want?

The Union Budget 2023-2024 will be presented by Finance Minister Nirmala Sitharaman February 1

For the upcoming budget, health sector urges the government to give adequate importance to the healthcare sector and highlights that while we are still battling to reach the pre-pandemic levels in terms of numbers, the upcoming budget may be helpful to designing and covering numerous aspects of the healthcare industry thoroughly.

Below are the industry expectations for healthcare sector from this year’s budget:

A government that invests in health will never lose an election

Since 2024 has general elections, 2023 would be the last full budget for Modi Government since 2019. COVID-19 has made us realise the importance of health for its economy, so it is high time that the nation gives health its due share, which is long overdue. Healthcare is a public good; if India needs to become a developed country by 2047, healthcare must be made tax-free, making it affordable to people from all strata. Besides this, the National Health Policy (NHP-2017) released in 2017 promised to increase the health outlay to 2.5 per cent by 2025. So, in 2023, this must go up to 1.80 per cent. It must include allocations for public hospitals, diagnostics, pharmaceuticals, and digital health, including R&D and capacity building for healthcare at all levels.

Furthermore, due importance of Women’s Health, Hearse van service at all public hospitals and towns, and basic diagnostics and specialty care must be a focus area for the government. Health is a Unique Electoral Proposition (UEP), and a government that invests in health will never lose an election. Investing in health will be a compelling proposition for voters, and for the Modi government to win the 2024 election with a massive mandate, focusing on health and education will undoubtedly break the record of 2019.

-Dr Rajendra Pratap Gupta, Founder of Digital Health Academy and Health Parliament (former advisor to the Union Health Minister, Government of India)

Urgent need to allow CSR funds to flow into blended finance for telemedicine and e-health to improve affordability

The Union Budget 2023-24 comes at a favorable time, with over 4,000 startups registered in the healthcare space, but the larger challenge of affordability and accessibility remains a constant concern. Lack of access to public and philanthropic funds is a concern. Smart healthcare initiatives such as telemedicine and e-health are seen as potential solutions to this due to India’s widespread smartphone adoption and improved mobile connectivity.

The government has taken a lot of positive measurements for the public healthcare system. In 2022, NITI Aayog released a report titled “Reimagining Healthcare in India through Blended Finance,” which discussed combining funds from various sources, including public, private, and philanthropic sources, to catalyse financing for some of the critical challenges confronting the healthcare sector.

While accessibility has significantly improved, there is an urgent need to allow CSR funds to flow into blended finance for telemedicine and e-health to improve affordability. Daycare procedures require similar funding to encourage early access to health care services.

Given the hybrid work culture, mental health awareness is very critical these days. The government should consider expanding the 80G specifically for donations to local government projects aimed at improving primary care affordability and accessibility or carve out separate 80D limits of up to Rs 20,000 for primary health care subscription packages that include mental health for self and extended family. Sideways, mandatory health insurance programmes for employers, including primary health care access provided by telemedicine/e-health companies, should be implemented. A portion of this can also be funded through blended finance in the case of SME/MSME.

With the development of the Prime Minister’s Ayushman Bharat Scheme, the government should exercise caution in allowing CSR funds to flow into the scheme, which would add an extra layer of protection to primary healthcare programmes. It is also important to note that this recognition of healthcare start-ups as service providers would go a long way toward improving early access to healthcare, thus managing the cost of the Ayushman Bharat scheme. Not to forget about the fact, that the government should allow insurance companies to distribute primary health care services as embedded benefits and in this case, a standard package could be developed in collaboration with industry and regulators.

-Satish Kannan, Co-founder & CEO, MediBuddy

Tobacco consumption in all forms is fatal for health and should be avoided by people. We need more drives, initiatives, and camps to create awareness on reducing deaths due to the lung ailments seen because of having tobacco products. Banning of tobacco in under 19  should be implemented,Essential vaccines and medicines should be available to tackle the burden of communicable and noncommunicable diseases in the country. Mental health and psycho-social care are imperative for all. Not much has been done when it comes to mental health. A large number of people suffer from depression, anxiety, stress, and post-traumatic stress disorder (PTSD). There should be increased awareness regarding mental health via camps, advertisements, drives, and initiatives as people fail to speak about these issues in open. These issues are still considered taboo in society and there are misconceptions surrounding them. Depression can also induce suicidal thoughts in people. Now day suicidal tragedy has increased in multifold So, people should be counseled for the same. We need more programs when it comes to healthcare and childcare. There are many neonatal issues that need timely intervention to save the lives of children. We hope this budget caters to the needs of each and every individual without any prejudices. Also, insurance for medical doctors whether private or government hospitals should be offered as many doctors lost their precious lives during the pandemic. Also to tackle future pandemic we must get equal insurance without being biased of being government or private.

–Dr Sunita Dube, a Renowned Radiologist and Founder, MedscapeIndia

The pandemic tested the Indian healthcare system to its limit. With the rise in Covid cases again across the world, the healthcare sector should remain an area of importance for the government this Union Budget. Introducing measures to establish a nationwide universal healthcare ecosystem would be appropriate for dealing with similar scenarios more easily in the future.

While the government has undertaken various initiatives for the improvement of healthcare infrastructure during the previous year, continued efforts and an increase in the budget towards improving the medical infrastructure, with a focus on improving public health and making affordable healthcare available across the nation, especially in tier 2 & 3 cities and beyond, is still needed. For chronic and lifestyle related diseases like diabetes that last over a long period and require continuous care the government must scale up prevention, enhance surveillance and strengthen care.

The out-of-pocket expenses of people dealing with chronic conditions are still high, raising concerns about the accessibility and affordability of medical care. India’s widespread smartphone adoption, improved mobile connectivity and smart healthcare initiatives such as telemedicine and e-health are viable solutions for resolving problems of access and affordability. The government should encourage the growth of e-health solutions and public-private collaborations to find sustainable solutions to alleviate the growing burden on our healthcare ecosystem.

With a major chunk of medical devices in the market being imported, and custom duties and taxes being very high on those, encouraging the production of medical devices within India as part of our Aatmanirbhar Bharat initiative would help drive innovation and affordability.

Finally, in general, start-ups rely significantly on ESOPs as an incentivization and retention tool.  In this regard, easing of taxation rule to shift the point of taxation to ultimate liquidity as opposed to ESOP exercise would be extremely beneficial for all industries since it would align taxation to real income generation for the employee.

-Gautam Chopra, Founder & CEO, BeatO

COVID was a wake-up call for Indian healthcare. India has not yet achieved the goal of spending 2.5 per cent of its GDP on healthcare. 90 percent of healthcare services are privatized making them unaffordable and out of reach for the common man. Providing insurance to all does not solve the access problem. We are anticipating more investment in improving healthcare access to all Indians and making it affordable.

–Amrit Singh, Co-founder, and CRO, Loop

Government should push the UHI across all the public and private medical establishments

Public Health policy in India is the need to ensure that all citizens have access to health services and facilities. The first step in this direction was taken with the launch of the Unified Health Interface (UHI), which facilitates data exchanges between different sources of information such as hospitals, primary care centers, and laboratories. It serves as an intermediate layer between these disparate sources of information so that they can exchange data in real-time. This will result in timely identification of patients with common diseases like infectious or chronic and allow them to be treated more effectively. This also helps in Real Time Disease Surveillance which aims at collecting real-time data on diseases so that they can be treated faster than ever before, leading to optimal resource utilisation. Government should push the UHI across all the public and private medical establishments in this budget.

-Vikas Gupta, Co-Founder and Chief Product Officer, MyDiagnostics

Increased budgetary allocations for programs such as the National Programme for Prevention and Control of Cancer, Diabetes, Cardiovascular Diseases & Stroke that aim to prevent and treat non-communicable diseases (NCDs), are crucial. Diseases such as diabetes pose a public health challenge that needs regular screening for detection, as well as sustained adherence to treatment and management. There is a need to monitor the continuous engagement of health systems, at all levels, to ensure a continuum of care. Moreover, screening and treatment at primary health centres via Ayushman Bharat needs to be scaled up.

Ensuring adequate funds for the rollout of the National Digital Health Mission will also help capture and analyse healthcare data, in line with the current data privacy regulations. This will help the country in two ways. Firstly, it will enable data generation that can help build policies for end-to-end healthcare support such as early screening and diagnostics programmes along with reimbursement of NCD care, etc. Secondly, the adoption of a digital framework will improve the delivery of targeted and personalised care leading to improved prognosis and an overall reduction in the health-economic burden in the future. A significant increase in healthcare spending will aid the implementation of a multifaceted approach that drives awareness, early diagnosis, adherence to treatment, better preventive measures, counselling, and overall access to quality healthcare.

-Omar Sherief Mohammad, Cluster Head India, Middle East & Africa, Roche Diabetes Care 

The 2022 Budget was a powerful step taken by the government to build towards a digital healthcare ecosystem. The overall health sector saw a 16% hike with the allocation of Rs 86,200.65 crores in the Union Budget of 2022 as compared to Rs 73,931 crore in 2021-22. The introduction of the National Digital Health ecosystem was a revolutionary step that will positively affect the processes and functioning of the healthcare system in the years to come. To support this initiative, we are expecting the government to allocate funds towards encouraging and strengthening the start-up segment of the healthcare sector that is focused on researching and introducing new technologically driven innovations within the healthcare industry. Additionally, we are expecting an increase in the GDP budget allocation to the healthcare sector. In the 2023 Budget, the government needs to focus on strengthening the primary healthcare system of the nation and place a strong focus on preventive healthcare and nutritional education for children. The government also needs to encourage private and public sector partnerships and open-end communication channels to ensure self-reliance for the overall healthcare sector. Additionally, with COVID cases rising again, the government should focus on introducing a fund dedicated to COVID prevention, emergency, and vaccination initiatives.

–Dr Simmardeep Singh Gill, MD & CEO, Sterling Hospitals 

The delivery of healthcare is fraught with difficulties due to factors including the population, the doctor-to-patient ratio, accessibility, and the complexity of the private and public healthcare systems. Clinical Decision Support System (CDSS) implementation at the institutional level will lower medical errors and raise the standard of treatment. Our healthcare ecosystem can address issues and improve the quality of care with the help of government initiatives like Ayushman Bharat and Digital Health India.

–Harish Ramachandran, Country Head – Clinical Effectiveness, Wolters Kluwer India 

The whole healthcare sector has big expectations from the budget 2023-24 and we expect the diagnostics industry will also not be left behind, in terms of growth and innovation. There is a need for greater standardization of diagnostic tests across the country. In a competitive healthcare market, accreditation like NABH and NABL not only raises the standard of diagnostics but also gives confidence to the patient or customer. We expect  that  encouraging  accreditation of labs is extended to tier 2 and tier 3 cities as well to provide equitable access to quality healthcare. We do feel that in the future, healthcare both public or private should provide equitable quality healthcare for all.

Government may reduce and gradually phase out the GST rate on diagnostic equipment, reagents, and all supplies related to diagnostic testing, as healthcare services are exempt from GST. This would enable the service provider to make the services more affordable to the consumer, which is the need of the hour.

In addition to that, we expect the government to scale up diagnostics infrastructure in the form of centers of excellence and promote leading diagnostics centers. Reducing import duty on sophisticated diagnostics equipment and more investment in public private partnerships.

–Dr Aakaar Kapoor, Medical Advisor and Chief Radiologist, City Xray & Scan Clinic 

Government should rationalise the duty structure by reducing high customs duty to 2.5 per cent on medical devices

The government should rationalise the duty structure by reducing high Customs duty to 2.5 per cent on medical devices and removing healthcess ad valorem in Union Budget 23-24 to ensure patient affordability and easy access to quality medical devices.

High customs duties have adversely impacted the costs of the medical devices and equipment in India which contradicts the government’s efforts to provide low-cost healthcare available to masses through programs like AB-PMJAY. This is particularly concerning since more than 80 per cent of medical devices are imported into India to meet the demand for quality critical care.

The high tariff structure also increases the risk of smuggling of high-value low-bulk medical devices from neighboring countries such as Nepal, Bangladesh, Sri Lanka and Bhutan where duties are significantly lower.

Incentivising skilling initiatives is necessary to bridge the skill gap in our healthcare ecosystem. We hope that the Union Budget 2023-2024 includes funding/fiscal incentives for upskilling of Health care workers (HCWs) to help lakhs of patients who are dependent on these HCWs for their care.

India needs big investments to meet the WHO recommended threshold of 44.5 skilled health workers per 10,000 persons required for achieving the Universal Health Coverage and Sustainable Development Goals. The pandemic exposed the acute shortage of health workforce in the country with the current density of active health workforce standing just one-fourth of the WHO recommended threshold.

With initiatives like Ayushman Bharat (PM-JAY), we estimate that the requirements for health personnel is set to grow exponentially not only in the larger cities but also in Tier 2 and Tier 3 cities. To meet the growing demand for skilled HCWs, the private sector should be encouraged further to take-up skilling activities along with National Skill Development Corporation (NSDC) or Healthcare Skill Council (HSSC) for which tax incentives can be provided.

–Pavan Choudary, Chairman, Medical Technology Association of India 

The Union Budget FY 2022-23 was welcomed by the industry for its comprehensive approach towards development of the healthcare infrastructure and facilities, with the increase in capex to Rs 7.5 lakh crores. Key strengths of the last year’s budget for healthcare included the government’s efforts to implement digitalization of the healthcare, in line with Digital India Mission by rolling out of Ayushman Bharat Digital Mission (ABDM), which will help deliver quality care at scale. From the coming budget, we expect the further strengthening of ABDM along with implementation of cybersecurity and data protection policies in consultation with industry. Against the backdrop of India’s nationwide 5G rollout in 2022, key announcements on allocations and policies that can influence 5G deployment for faster and safer healthcare delivery are awaited. With rising incidences of both communicable and non-communicable diseases post COVID 19, further strengthening of infrastructure and bridging human resource and skill deficiencies for care area deliveries across Tier 2- Tier3 cities, semi-urban and rural areas focusing on promotion, prevention, therapy and post care is expected from this year’s budget.

Over recent years, the government has spurred efforts to support local R&D and manufacturing for the MedTech sector by setting up Medical Device Parks and implementing PLI schemes. We anticipate expansion of PLI scheme for MedTech Sector with adequate flexibility integrated in the scheme to address the ever-evolving market dynamics to truly make Indian domestic manufacturing, globally competitive. Rationalization of GST for MedTech sector, extending zero rating and schemes like Remissions of Duties and Taxes on exported products (RODTEP) to Export Oriented Unit (EOU) /Electronic Hardware Technology Park (EHTP) will provide the needed impetus to local manufacturing for domestic use and exports. We also hope to see the formalization of the greatly needed Medical Devices Policy, which can facilitate well-structured growth for the sector and help accelerate our capabilities to innovate, manufacture with self-reliance and export. While the thrust on local manufacturing is needed to reduce the import dependency, we have to be cognizant that it will take substantial time to start manufacturing of high end-high value equipment & devices in the country. Exemption of customs duty on the import of high end medtech equipment will help in reducing the cost of healthcare for the end customers i.e., the patients.

–Dr Shravan Subramanyam, Managing Director, Wipro GE Healthcare

The medical device industry is highly capital intensive, hence requires the constant intercession of the government to encourage manufacturing and production, both in scale and quality. As we gear up for the Union Budget of 2023-24 with the spirit of self-reliance, the industry demands favourable policymaking in line with the current inflationary challenges. Reduction of custom duties on raw material, removal of the additional 5 percent health cess and increasing export incentives under Remission of Duties and Taxes on Export Products Scheme (RoDTEP) remains critical for trade margin rationalization. Relooking at the tax and tariff structures on medical device imports would go a long way to provide some leeway for the industry to flourish and consequently boost the domestic R&D ecosystem.

For the medtech sector to grow holistically, the compliance burden needs to be brought down collectively to make the environment conducive for business. The ease of application and registration procedures, supervisory regimes, credit structures, transparency in pricing, taxes and cross border trade will encourage local manufacturing, R&D and address the concerns in our supply chains. Strategic investments and partnerships with commissioned medtech Parks and their readiness for national and international companies should be able to push the needle in the positive direction. The Union Budget of 2023-24 needs to outline industry supportive policies, simplified protocols, and simple GST norms to aid the overall development of the medtech sector.

–Anish Bafna, CEO & MD, Healthium Medtech

In order to enable an ‘AatmaNirbhar Bharat’, the Union Budget 2023 will play a vital role in the growth of the medical device industry to facilitate easy access to healthcare services.

India presently heavily relies on imports of medical devices, primarily from China. This has only become more prominent in the last two years, making India’s position fragile. Around 80 per cent of medical devices bought are imported to meet the need for critical care equipment. We are hoping for a revision in the tariffs and taxes imposed on these items. It is necessary for customs duties to be cut down to 2.5 per cent and tax exemptions increased to guarantee affordability.

In addition, GST is levied at 18 per cent on software, which is closely intertwined with medical devices. This has led to increased costs for software-based services associated with medical devices, making them expensive and inaccessible to patients.

The increase in the healthcare budget will boost the adoption of technologies – artificial intelligence, digitization, remote monitoring – to provide quality healthcare to every Indian in even the most remote locations.

We are confident about the Union budget for 2023 and believe that the government and regulators will continue to support healthcare with fiscal and policy support. We hope to see positive policies that would bolster ‘brand India’ and raise international awareness of Indian medical devices to strengthen the government’s vision of ‘Made in India for the world’.

–Mudit Dandwate, CEO & Co-Founder of Dozee

Adequate investments in R&D can help advance the industry and make India a ‘global centre for X-ray emitting.’ The returns with higher investments in R&D will boost innovation. In India, the building up of capabilities in technology and process transfer, hampered by the pandemic, will take 3-5 years to be restored.

I would also like to emphasise on the need to retain the existing duty Structure for the X-Ray emitting units like Linear Accelerators, Cath Labs, Mammography machines. An increase in import duties will directly affect hospitals and patients who are already facing financial strain due to the pandemic. As a result, patients will have to pay more for availing healthcare services. Moreover, this will also hamper clinical service providers from expanding their services outside of metro cities.

–Vineet Gupta, Director- Government Affairs, Varian Medical Systems

Provisions for building digital infrastructure

The healthcare services and devices industry is one of the fastest growing, and important sectors of our economy and it would be great to see impetus provided to three areas:

Incentives to healthcare providers and aggregators to promote the Health ID under the Ayushman Digital Health Mission (ADHM), to ensure ubiquity of patient healthcare data across care providers.

Incentives to healthcare financing, insurance and payments providers that helping reduce the burden of healthcare payments

Reduction of duties and taxes on the import of medical devices, as this ensures good quality treatment to our citizens at affordable costs.

–Chris George, CEO & Co-founder, QubeHealth

It is admirable that the Government of India has operationalised over 1.5 lakh health and wellness centers under Ayushman Bharat Mission at the end of 2022. On similar lines, it would be great if the 2023 budget provisions for incentives to expedite the adoption of Ayushman Bharat tech stack. We believe that it will be a transformational move for the Indian healthcare ecosystem, enabling high-quality health outcomes for everyone. We also expect the budget to focus on making access to healthcare easy and affordable. It can be done by encouraging the digital delivery of healthcare. So, we hope to see specific provisions for building digital infrastructure. It demands investment in improved connectivity, power supply, and other healthcare infrastructure.

From an affordability perspective, OPD insurance is an area that needs greater attention. Making OPDs cashless will ensure more people consider preventive healthcare as a priority. It will encourage people to consult providers earlier to avoid health complications. Provisions towards the same is something we are looking forward to.

While Ayushman Bharat could make all of it possible, the execution requires greater/improved private-public partnership (PPP). We look forward to announcements in Budget 2023 towards making this a reality.

–Sanjay Vinayak Founder, Connect and Heal

The country needs higher allocation to the health sector to ensure improved accessibility of quality healthcare in the country. The government should think of investment in healthcare as investment in human capital, because a healthy nation can ultimately impact the economy of the nation. The sector also needs policies and incentives that encourage innovation in digital healthcare and promote partnerships between private and public sectors. While Ayushman Bharat Digital Mission (ABDM) has several elements aimed at transforming healthcare in the country, investments need to be made to further push adoption and also to encourage private players to participate with clearly defined delivery models.

–Siddhartha Nihalani, Co-founder, Practo

The COVID-19 pandemic has exposed the fragmented nature of the healthcare industry. In the budget for 2022–2023, it was evident that necessary steps had been taken towards improving healthcare infrastructure. With this, we are slowly moving towards creating a better healthcare ecosystem; however, to strengthen it further, technological adoption, especially in rural areas, should be the focus of this year’s budget. The current burden on rural healthcare infrastructure can be significantly reduced with technology adoption and policies that allow current players and neo-healthcare start-ups to invest in Bharat, rural India where more than 60 per cent of the population lives. Additionally, the budget for 2023–24 should focus on human capital in rural healthcare, by having a greater number of healthcare professionals in tier II, tier III & IV towns, and also creating policies to have a steady flow of this capital by having more medical & nursing colleges in rural India. The budget for 2023–24 should also focus not only on spending in order to maintain the current healthcare infrastructure but also invest in increasing the number of healthcare units, such as doubling the number of PHCs, so as to decrease the load on secondary and tertiary healthcare units.

–Vidyasagar Diyavath, Sales Head, Carin Life Sciences

India – pharmacy of the world, is expecting budgetary support in various areas aiming at enhancing the entire value chain. Increased allocation to healthcare sector focused on research & development (R&D), upskilling, digitisation, medical insurance and manufacturing will give requisite boost to the industry.

On R&D side, it’s the time that India gets positioned as the go to place for R&D. While the R&D policy is currently under draft stage, certain fiscal benefits which can be brought through this Budget, should be announced and not deferred. As regards manufacturing, new domestic manufacturing companies can benefit from an income-tax rate of 15 per cent (plus surcharge and cess subject to conditions). To attract more investments and for tax certainty, the budget should relax the sunset date for eligibility and relax the conditions. On GST front, it is expected to bring more life-saving drugs into the lowest rate of GST and customs duties so as to ensure affordability and better management of diseases.

From digitisation perspective, it is important as to how the current resources and available infrastructure are optimally utilised and how technology is used to further promote tele medicine, upskilling of healthcare professionals and bridging the gap considering demographic condition of the country. Further, specific focus on medical insurance schemes and availability of the same to larger set of population at reasonable rates, will increase the demand of healthcare, that in turn, incentivises the players and industry to invest more. Overall, the sector requires the sops that makes healthcare facilities available to all at affordable rates, incentivises the players to invest more, and positions India as a prime destination for manufacturing and R&D.

–Shuchi Ray, Partner, Deloitte India

India’s healthcare system was put to test during and post the pandemic in terms of the financial and the need for adoption of technology across the sector to manage their patients. The recent announcement of financial incentives (Digital Health Incentive Scheme) by the Government of India, will help in strengthening the digital health infrastructure through its ABDM (Ayushman Bharat Digital Mission) and provide a much needed focus on healthcare digitisation & digitalisation in India. The Ayushman Bharat insurance programme has also helped in Indian’s getting access to quality healthcare and helped push private healthcare providers to deliver care to a wider population. With pressured hospital operating margins, the recently applied GST for in-patient billing has added to the margin pressure. We would request the government to consider providing tax rebates, subsidies or any form of incentive schemes that would ease the financial burden for health facilities who are looking towards digital transformation for better healthcare delivery. Furthermore, to fuel start-ups who are supporting the digitalisation of healthcare, we seek the government’s support in removal or reduction of GST applicability, making our services more effective for healthcare providers. This will help boost the adoption and accessibility of  digital healthcare and accelerate India’s digital health agenda including data interoperability, personalised healthcare and improve the quality of healthcare deliver in India.

–Shyatto Raha, Founder & CEO, MyHealthcare

The National Health Authority (NHA), in its most recent announcement, plans to introduce a new system wherein the performance of the hospitals empaneled with the central flagship scheme Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB- PMJAY) will be graded on value-based health care rather than the volume of services they can provide. Grading hospitals will undoubtedly raise the standard of care, but it also requires real-world monitoring systems that concentrate on patient care management and prompt treatment for the most vulnerable patients, particularly those at high risk. New-age technology, such artificial intelligence, that enhances patient outcomes, lowers the risk of hospital readmission, needs to be the area of focus in the upcoming union budget in 2023. While the Government is already making a good amount of expenditure with regards to healthcare, the same needs to be now efficiently and effectively allocated/deployed to moving towards a value-based care model which will contribute to the healthcare system of the country as a whole.

–Apurva Sule, Chief Business Officer, Heaps Health

It is time the government looks at minimum quality standards for the industry and also appoint a nodal agency to standardise lab tests across the country

The 2021 Economic Survey recommends that the government spending on healthcare should at least be 2.5 per cent to 3 per cent of GDP. It also suggests that over the past 15 years, private health insurance expenditure has jumped from 1.6 per cent (2004-05) to 6.6 per cent (2018-19). India’s out-of-pocket expenditure on health remains high even as government expenditure on health has also gone up over the years. The health budget needs a significant and a transformative push to protect our citizens from plunging in to poverty due to debt related to unexpected medical expenses. Over 40 per cent of health expenditure is medicines and pharmaceuticals and any improvement in funding in this area will be a significant positive move. Preventive healthcare expenditure has remained abysmally low even with enough evidence that mass preventive screening can bring down overall healthcare costs in the long run.

For the diagnostic industry, it is time the government looks at minimum quality standards for the industry and also appoint a nodal agency to standardise lab tests across the country. Standardising test codes by adopting LOINC Codes and homogenising lab report formats can help patients as well as clinicians. Taking a cue from the CLIA standards in the US for lab developed tests, our regulatory bodies like CDSCO can open up the regulatory framework that will help laboratories build indigenous test customised to the Indian population, encourage more research and foster innovation. This will reduce our dependence on imported kits for laboratory tests. India could become self-reliant in test kits in a few years with the right kind of support from the policymakers and the government. Reducing the high custom duty on the import of diagnostic equipment and kits can help large laboratories like SRL to improve efficiencies and increase investments in R&D. Easing the cost burden by giving input tax credit for GST will aid the entire healthcare industry to reduce input costs.

The government could look at increased allotment of budget to public private partnerships and move from a provider role to an enabler role. This is the fastest and most efficient route to deliver quality healthcare to the masses. Policymakers can customise health delivery to districts, cities and towns by harnessing the big data generated by laboratories. PPPs for such collaborations could be useful as labs can provide actionable health insights that can improve the health indicators of a particular state. We also hope that the government will look at instituting an official council that can help establish credibility and credentials of medical laboratory professionals and allied health professionals. In absence of any regulatory legal mechanism to oversee the educational and professional standards, educational institutions have been mushrooming unabatedly across the country. As seen in the pandemic, along with doctors, medical lab and allied health professionals are the backbone of the industry and it is important to provide avenues for up-skilling and reskilling by way of continuous technical education.

– Anand. K, CEO, SRL Diagnostics

The pandemic has instigated the need for people to monitor their self-health and accordingly apply lifestyle changes to prevent or manage diseases. And in such a scenario, cost effective, rapid and accurate diagnosis is of utmost importance. Hence to facilitate and motivate more and more people to go for preventive tests, the government should push for enhancement of health insurance premium exemption, and an increase in tax exemption on preventive health check-ups. At the same time, while healthcare services are exempt from GST, the high GST rates on diagnostic equipment, re-agents, lab supplies and devices, ultimately is a hindrance in bringing down the cost to the consumer. I look forward to some relief from this burden on the consumer by a reduction in the GST rates.

–Deepak Saini, Founder and CEO, Healthians

Public-Private Partnership (PPP)s are the way forward for creating a more sustainable healthcare system

The COVID-19 pandemic has placed our healthcare system to the test. We successfully addressed some of the critical challenges with the government’s assistance and swift regulatory action. However, more needs to be done, beginning with an increase in public healthcare spending. We urge the government to allocate more funds for achieving universal healthcare across India.

The pandemic transformed the way we think about medical emergencies, while also highlighting systemic flaws in our health-care system. Healthcare in India is undoubtedly underfunded and underutilised. We need a plan to build an equitable and sustainable medical infrastructure, which can only be delivered by increasing investment (both public and private).

PPPs are the way forward for creating a more sustainable healthcare system. It combines the best capabilities of both sectors: the public sector’s regulation and subsidies, as well as the private sector’s expertise. This can also provide a runway for allocation of money wisely and clear accountability structures in place at all times. Implementation of the PPP model: Identifying opportunities for PPP models and establishing a sound PPP framework could increase private sector investment, boost public capacity while enhancing efficiency, and facilitate care.

The government should think about zero rate GST on healthcare services, allowing service providers to claim Input Tax Credit. As GST is not payable on healthcare services, service providers are not eligible for input tax credit. Enabling this would ensure that input taxes are not added into the cost of the services, and will provide some relief to the patients.

The government may consider to incentivise the citizens to opt for a higher medical insurance coverage by: increasing the existing tax deductions limit on medical insurance premium may result in savings, which can then be used to improve medical insurance covering all dependents in the family; reducing the GST rates on health insurance and phasing it out gradually. These measures may encourage the citizens in the overall adoption of health coverage. Also increase the health checkup deduction limit from the present Rs 5000 to encourage preventative health checkups.

Invest in technology to overcome the rural-urban healthcare divide and make healthcare available to all citizens by expanding our universal healthcare programmes.

While we are still battling to reach the pre-pandemic levels in terms of numbers, the upcoming budget may be helpful to designing and covering numerous aspects of the healthcare industry thoroughly. A rock-solid healthcare infrastructure is the need of the hour. We envision and strive for a future in which healthcare is not classified as public or private, but is simply known as healthcare.

-Felix Fernandez, Finance Director, Holy Family Hospital, Mumbai

Healthcare organisations must be given access to working capital and preferential funding

The outbreak of COVID-19 has taught the healthcare sector some important lessons. The healthcare sector has and will continue to play a crucial role in saving lives, treating other ailments while tackling the pandemic. With the disruption caused to the healthcare sector during this period, we urge the government to give adequate importance to the healthcare sector in the upcoming Union Budget 2022 by considering:

• Special schemes that should be provided for formal training of doctors and nurses to enhance skills and bandwidth to offer care to a larger population which will help strengthen the quality of healthcare resources in the longer run
• Building capacity for intensive care by enhancing skills of nurses and by providing better equipment and infrastructure
• Significance to be given to appropriate screening for Non-Communicable Diseases (NCDs) to ensure timely diagnosis and treatment which will help in reduction of hospitalisation in the last minute
• Upgrading infrastructure at primary healthcare level for early outpatient treatment thus reducing hospitalisation time and cost
• Benefits to be given to manufacturers of healthcare equipment & consumables under the ‘Make in India’ campaign for high quality products and healthcare equipment to be manufactured at reasonable costs
• Healthcare organisations must be given access to working capital and preferential funding to ensure that the overall cost of operations is reduced
• Healthcare sector needs to be considered as a priority and an essential service. Various subsidies and benefits should be given on land rates and other necessities such as electricity, as it will pave for accessible and affordable healthcare with better infrastructure and high quality treatment improving access to care and better patient outcomes.

-Dr Alok Khullar, CEO, Gleneagles Global Health City, Chennai

The Union Budget 2023-24 for the healthcare sector should be drafted keeping in mind the long-term vision for building a “Healthy India”. Although the Ministry of Health and Family Welfare was allocated around Rs 86,200 crore, a 16.5 per cent increase compared to the previous year, the public health spending this year should be increased by a minimum of 30-35 percent to achieve the targeted 2.5-3.0 per cent of GDP by 2024-25. The focus should be on below five priority areas:

Healthcare infrastructure development fund: Capital incentivisation for the development of healthcare institutes across tier-II and tier-III cities-land allocation at concessional rates, tax rebates, subsidies for medical equipment

Health insurance of India’s missing middle: Health coverage and financing models under AB-PMJAY to provide mandatory health coverage to the rest of the missing population

Tax benefits for healthcare skilling and development: Provision of recovering the money invested in the skill development of the healthcare sector as offered to a manufacturing company as per the Income Tax Act, 2013-Section 35CCD

Tax benefits on preventive health check-ups: Government should increase the health checkup deduction limit of Rs 5,000 to Rs 15,000 for a family in the budget 2022 to encourage citizens towards preventive health check-ups

Incentivisation for digitisation in the healthcare sector: Providers who take up the digital transformation journeys could leverage the subsidies and/or indirect tax incentives for capital and operational expenses

–Lalit Mistry, Partner and Co Head, Healthcare, KPMG in India

The first post-pandemic budget is expected to bring in new possibilities and opportunities for the healthcare industry. To recuperate the Indian healthcare system, several measures might be taken in the budget such as reducing import taxes for life saving critical medical equipment, Ayushman Bharat Digital Mission, efforts towards affordable healthcare and reducing dependence on imports. Finally, Viability Gap funding scheme may be improvised for addressing the healthcare & related infrastructure problems in the country.

Given the Indian economy’s resilience to global slowdown, there is an expectation that this year’s budget will come up with schemes for supporting the healthcare industry & infrastructure through central funding and tax relief packages/incentives.

–Vijay Chawla, Partner & Head-Life Sciences and Head-Risk Advisory, KPMG in India

Since COVID-19, healthcare has been a constant agenda in the news and with several variants and sub-variants of the virus being discovered regularly, it still holds to be a point of discussion and concern. While closely working in rural areas and interacting with patients, we got an opportunity to study the problems faced by people every day. We have noticed that problems like sexual and reproductive health, diabetes, mental health issues and rural healthcare infrastructure require special attention and should be given special consideration in the budget of 2023.

The budget allocation to the healthcare sector should be increased by minimum 20 per cent from the last year i.e., it should be at least Rs 1 crore that can be sub-allocated to various departments like, ABDM, Infrastructure, education, Human Resource, Research and other programs.

To achieve the figure of 2.5 per cent of GDP as committed in National Health Policy, 2017, the stagnant figure of 1.3 per cent must rise to at least 1.5 per cent this year. Being a telemedicine company, we strongly recommend improvements in infrastructure in terms of internet facilities, properly equipped tertiary hospitals in case of patients who require more than just consultation.

–Dr Vishesh Kasliwal, Founder & CEO, Medyseva 

The Budget presented in 2022 was a strong step by the Government of India to move towards a digitalized future. The introduction of an open platform for the National Digital Health ecosystem that would consist of unique health identities, digital registries, and access to health facilities was a futuristic approach to strengthen the healthcare ecosystem as a whole.

With these steps taken by the Government, the 2023 Budget needs to reflect the continued support of the government in building the healthcare sector stronger. Some of the expectations are as below:

Medical tourism: Since India aspires to be a top medical tourism destination, increased policy support and better connectivity can drive medical tourism beyond the metro cities in India which also has state-of-art medical infrastructure and medical services.

Reclassification and incentives: Since hospitals is a long gestation business, if healthcare is classified as a priority sector for the government, it can attract funding for a longer duration and attractive rates. Also, long term tax holidays for new investments into healthcare will also give a big boost to investments in the sector.

GST in healthcare: Enforcing GST on the output healthcare services for hospitals with the option to claim complete input tax credits will be useful to reduce the burden on hospitals. This will help the sector to derive benefits of the GST transition which many sectors have received.

Concerns while transitioning to the new income tax regime: The hospitals which have unutilised MAT credit, are unable to move to the reduced corporate tax regime of 25 per cent. Due to this, most of these hospitals are still under the 35 per cent corporate tax regime. The government can make it easier for such hospitals to move to the 25 per cent corporate tax regime, as these are the hospitals which have undergone a major greenfield capacity expansion.

Clearing of past dues under central government schemes: Hospitals empanelled under such schemes, often face major working capital and cash flow concerns as the reimbursements for these patients often take 18-36 months. If the budget is allocated to these schemes based on the good outstanding due to hospitals, it will not only improve the cash crunch at these hospitals but also reinforce a lot of confidence to invest in healthcare.

–Shanay Shah, President, Shalby Hospitals

Government should reduce import duties on necessary components to facilitate the production of dependable medical cold chain chains

As we carefully tread into 2023, it is crucial to focus on the events that made major headlines this year. The pan-Indian vaccination drive, which resulted in the immunisation of approximately 100 crore people, saw commendable success achieved by the Indian government. Nations praised this heroic act all around the world. This year, we excitedly await the financing announcement for the initiatives we want the government to prioritise. Increasing immunisation spending, particularly across the entire healthcare system, is one of the goals. The nation must be well-prepared since the fight against COVID-19 is far from ending. Alarmingly slipping numbers of the infant immunisation also require immediate attention.

Any vaccination program’s success also hinges on a reliable medical cold chain. We believe that establishing a separate industry and separating the medical cold chain from commercial refrigeration could benefit the sector’s expansion. The government should reduce import duties on necessary components to facilitate the production of dependable medical cold chain chains.

-Jesal Doshi, Deputy CEO, B Medical Systems

Incentivisation of online and specialist medical learning and training providers by way of a range of financial and tax subsidies

While the government’s push in the last budget on Ayushman Bharat Digital Mission as also augmenting overall healthcare infrastructure is indeed welcome, the pandemic battle has further exposed the acute deficit in terms of the availability of trained healthcare workforce in the country. As such, we hope that the government in the upcoming budget suitably incentivises online and specialist medical learning and training providers by way of a range of financial and tax subsidies. This would help the latter to bring in the most advanced and sophisticated training programmes for not only doctors and nursing staff in the country but also paramedics and others who are usually present on the ground in emergencies and critical care situations. In addition to catalysing access to top-class learning and skill sets to smaller towns and the hinterland, it would also help the cause of Continuous Medical Education (CME), an integral part of the upskilling of healthcare professionals. In fact, we hope that online and digital educational platforms providing both basic and niche training services for medical students and professionals are completely exempted from GST. In the budget, while the finance minister is likely to focus on chronic care, expanding health insurance and further accelerating ABDM, it would also continue with and expand the scope of PLI-type financial support and clustering programmes for infrastructure support for pharma and medical device segments with a view to achieve Atmanirbharta for the country.

–Deepak Sharma, CEO, MedLern

COVID-19 has taught the healthcare industry many lessons and exposed the vulnerabilities in our healthcare delivery system. There have been many approaches suggested by industry experts to strengthen healthcare delivery & outcomes. In addition to the various methodologies suggested, it is very crucial to improve the quality of medical education and increase hands-on training for doctors to be job ready to deliver patient care at optimum standards while also building skill labs across medical colleges. The healthcare infrastructure, especially in the private sector, plays a huge role in providing tertiary & quaternary care and thus should get the adequate financial impetus to enhance its capacity. Enough budgetary allocation must be made to improve the quality of nursing education and provide practical training to have a job-ready workforce to replace the exodus of trained nurses from India. A similar focus is needed in allied & paramedical staff education & training. Healthcare research in India is limited and needs sustained support from the government to enhance and increase the R&D efforts and sell the successful results to the entire world. As of now very few innovator molecules are researched & developed in India. The same goes for precision surgical instruments. These are some areas that require special attention in the upcoming Union Budget 2023.

– Dr Alok Khullar, CEO, Gleneagles Global Health City, Chennai

Public-private partnership model to ramp up primary healthcare infrastructure

Given the stress exerted by the COVID-19 pandemic on the public healthcare system in the nation, there is expected to be a stronger focus on public expenditure on healthcare. In line with the increase in healthcare spending over the past couple of years, the allocation for public healthcare might see a record increase as India prepares to increase its spending to 2.5 per cent of GDP by 2025. The Government of India is also expected to tap into the public-private partnership model to ramp up primary healthcare infrastructure in the nation. The healthcare industry has long-standing expectations focusing on public health and affordable care at the center. India is among the top destinations globally for medical tourism; therefore, it requires increased policy support. Ease of GST norms and measures to ensure ease of doing business will increase investment in the sector to facilitate the industry’s long-term growth. The government’s support in this would be critical. ABDM (Ayushman Bharat Digital Mission) has paved the way for the digital healthcare ecosystem, and this budget looks positive to continue contributing to its growth. By 2047, the healthcare network will be more efficiently digitised with a greater number of participants and covering nearly the whole of India.

–Dr Vaibhav Kapoor, Co-founder, Pristyn Care

As per an economic survey, the Indian government was estimated to spend over two percent of India’s GDP on healthcare in the financial year 2022. This was forecasted to reach over 2.5 percent of the GDP by the financial year 2025. The GDP percentage of spends in healthcare is still low in comparison to other growing nations. There is the need of the hour to allocate an increase in the budget to healthcare specifically in times of resurrection of the pandemic in China. The threat is looming again in the world, and we need to be prepared to fight against any health hazards. The budget spent on medical infrastructure should be increased to build a strong healthcare ecosystem. The allocation of funds should also focus on prevention, and creating an awareness of good health habits to avoid NCD s and their burden on the exchequer and society. Increasing spending in AYUSH and utilising them effectively will bring down the costs of healthcare in the country while focusing on prevention.

The government needs to encourage public private participation in healthcare to improve the quality of medical care and outcomes in a cost-effective manner. Digital health, telemedicine, blockchain electronic health records, data analytics, and the Evolution of Remote Care will help in building a robust healthcare network in India. The government needs to standardise the medical education system and implement strong laws for excellence in medical education. It is also necessary to allocate a larger specified budget for R&D, so that the country can have more clinically proven treatments. Making and implementing a vision for a bimari mukt Bharat is the need of the hour.

–Dr Mukesh Batra, Founder & Chairman Emeritus, Dr Batra’s Healthcare

India’s healthcare system showcased immense resilience and an ability to withstand major adversities during the pandemic. We must continue to prioritise allocation to healthcare infrastructure, facilities and services in the upcoming budget to ensure equitable distribution of healthcare in tier 2 and 3 cities.

An increase in allocation of funds to skill development in the healthcare sector is imperative to ensure supply of trained talent and standardisation of services. Additionally, the private sector must be incentivised to invest in the rural areas. This will generate higher employment and also deliver access to quality healthcare in every corner of India. Public-private partnerships also hold great potential to change the healthcare scenario of the country, hence policies to encourage this will be beneficial in the long run.

Access to quality healthcare is a basic right and the Union Budget of 2023 should aim to increase the allocation of funds towards this sector to ensure that every Indian can have access to quality healthcare.

–Aakash Sachdev, Director of ASG Eye Hospitals (ASG) and Managing Director of Foundation Holdings

Awareness around peritoneal dialysis should be taken up by GoI and NGOs

The Indian dialysis market has been growing over the past few years, due to factors such as the increasing diabetic population, uncontrolled diabetes, high blood pressure and aging of the population, increasing cases of ESRD, and many other factors. The aging population is one of the main drivers of growth in the global dialysis market. The aging population is more prone to chronic kidney disease because it is associated with serious diseases such as diabetes, cardiovascular disease, stroke, and arthritis, which would create opportunities for dialysis market growth. However, the market growth would be negatively impacted by various challenges such as high treatment costs, accessibility, etc.

“Medical Officers’ Manual for Prevention and Management of Chronic Kidney Diseases” which was recently released for the first time in India from the National NCD Division by Dr. V.K. Paul, Hon’ble Member, NITI Aayog on 25th November 2022 is a positive direction to Medical Officers of the Primary Health Centre/CHC and District Hospital for prevention and early detection of CKDs as Dialysis is covered under ABPMY. I am quite hopeful that the awareness around peritoneal dialysis is also taken up by GoI and NGOs so that a huge segment of the population in need of regular dialysis, can avail of these services at home.

–Aseem Garg, Founder & CEO, DCDC

Lowering GST and other import taxes should be prioritised in order to make health insurance and eye-care equipment more affordable

People in India are becoming increasingly aware of the enormity of vision loss. This is primarily due to the major initiatives launched by eye-care hospitals to examine and resolve discrepancies. As the growing population ages in India, the burden of eyesight disorders will only shoot up. Many of the most prevalent causes of blindness or moderate-to-severe loss of vision, including cataracts, under-corrected refractive error, glaucoma, and diabetic retinopathy, are preventable if frameworks for early detection and intervention are freely accessible. Worse, the burden of eye diseases and visual impairments is not uniformly distributed: it is often far higher in remote regions, among low-income people, women, senior citizens, individuals with disabilities, minorities, and indigenous populations.

Therefore, to commit to a greater push to make eye care services an essential component of universal health coverage and tackle the skyrocketing impact of vision loss on sustainable development, the union Budget 2023 must come up with new mechanisms and initiatives for large-scale eye screening and testing. Following the COVID-19 pandemic, India is confronted with a mountain of backlog due to a steep decline in the number of eye surgery, particularly in rural areas. So we also anticipate initiatives and government support to assist eye-care chains in clearing the backlog. Moreover, lowering GST and other import taxes should be prioritised in order to make health insurance and eye-care equipment more affordable.

-Dr Ajay Sharma, Chief Medical Director, Eye-Q Superspecility Hospitals of EyeQ and Rajat Goel Co-founder and CEO, Eye-Q Super speciality Eye Hospitals

Women wellness-specially women’s hygiene is an area that needs to be emphasised

The primary focus of the union budget is to promote inclusive growth in the country. However, women wellness-specially women’s hygiene is an area that needs to be emphasised.

To go green in the future, the government should encourage the use of recyclable menstrual products. This one initiative could bring down the number of disposable sanitary napkins adding to the landfill, which currently stands at 12.3 billion annually. The government could support start-ups who are endeavouring to offer biodegradable products at affordable prices, keeping in mind the current condition of the environment.

The Union Budget should emphasis on women wellness especially menstrual hygiene. We already have tax exemption on sanitary pads, however, this could be extended to manufacturing and production. The expenditure incurred in their production is still taxable. Decreasing import duty for raw materials could help such start-ups to stretch themselves in the market, meeting the public demand.

Further, decreasing import duties for raw materials could bridge the gap between supply and demand as well encourage more Indian manufacturers to start manufacturing biodegradable pads in the country. There should be policy level incentivisation for Made In India products, start-ups helmed by women and ventures that focus on sustainability and solving for women’s issues.

–Kiriti Acharjee, Co-founder, HealthFab

Government needs to factor in the challenges early-stage for-profit social enterprises

With the framework for Social Stock Exchange (SSE) put in place, a pathway has been built to mobilise greater levels of funding for social sector innovations and impact-led businesses. This can be a gamechanger for cash-strapped sectors like healthcare, that need rapid reforms to strengthen India’s preparedness for health emergencies. However, the initial focus of SSE seems to be more towards not-for-profit enterprises as requirements to list for-profit social enterprises remain as stringent as for other corporates and SMEs wishing to list on the boards to raise capital. The government needs to factor in the challenges early-stage for-profit social enterprises face in scaling operations to below tier-2 and rural markets, and need additional support and liberal policies to raise capital from the markets.

Additionally, Blended Finance, which looks at leveraging commercial capital for social enterprises by de-risking investments using philanthropic capital, along with Impact Investing, is thus emerging as a promising potential solution. In the last year’s budget, Blended Finance was mentioned as one possible way to enable this for sunrise sectors. This budget needs to make specific actionable provisions in this space for setting-up the proposed thematic funds. The government also need to recognise that new ways of working are required to unlock greater commercial investments to supplement its limited resources.

–Himanshu Sikka, Project Director, SAMRIDH and Chief Strategy and Diversification Officer, IPE Global

India bending the curve on TB is crucial to the overall health of the country

The COVID-19 pandemic has had a crippling effect on the nation’s ability to achieve its tuberculosis goal of having a TB Mukt Bharat by 2025. As one of the top four countries that account for most TB deaths, and the highest TB burden country in the world, it is imperative that the budget provides increased support towards existing initiatives along with accelerating innovations towards people centered care, community engagement and the global TB vaccine. India bending the curve on TB is crucial to the overall health of the country and will have a ripple effect the world over.

–Vikas Panibatla, CEO, Tuberculosis Alert India (TBAI)

Awareness of women’s hygiene and prenatal care, and an increase in the healthcare workforce should be kept in mind

In my opinion, achieving a healthy India depends entirely on the hygiene and health of women. The long-term goal of creating a “Healthy India” with a sustainable healthcare infrastructure, awareness of women’s hygiene and prenatal care, and an increase in the healthcare workforce should be kept in mind when drafting the Union Budget for the healthcare sector in 2023–2024. A 30 to 35 per cent budget increase is required, with a focus on the priority areas like awareness campaigns on women’s health and mensuration care. Importance of mensuration cups and other products during periods.

–Sandeep Vyas, Founder and CEO of Mildcares’ Gynocup