Union Budget 2016-17: Dr GSK Velu, Chairman and Managing Director- Trivitron Group of Companies

Focus on enhanced healthcare facility for rural population and medical insurance of Rs 1 lakh coverage for one third of population across the country and additional Rs 30,000 for senior citizens is laudable, but would have been happier if some concrete steps to bring down overall healthcare cost was announced in the budget.

The finance minister should be applauded for bringing budget’s focus on rural community as well as senior citizens. Budget’s proposal to set up 3,000 medicine shops in rural areas and insurance scheme for senior citizens is noteworthy and noble intent of low cost access to dialysis centres in every district to benefit over 2.3 million estimated ESRD patients in India. But then, given India’s humongous population with majority of people with modest income, the biggest challenge that our country focuses is to ensure low cost quality healthcare access to majority of Indians. The government needs to realise that medicines are just one component of healthcare cost and at times not the major component of healthcare cost also. Medical devices are equally critical part of overall healthcare cost as medicines and diagnostics. If the government had focused on giving a major boost to medical device manufacturing in the country and also ensured a robust MRP regime, then it would have served two purpose with one shot – i.e. (a) Lower the overall healthcare cost and better price stability and (b) lead to sharp reduction on import dependency.

The additional critical benefit would have been quality job creation within the country. Anyway, we are still awaiting the fine print and we are just hoping that some of our pre-budget recommendations have been incorporated.

These include:
(a) Withdrawal of Concessional Duty Notification of Basic Duty and Special Additional Duty of Medical Devices and for reverting of Duty on the items covered under HS 90.27, 30.06 and 38.22

(b) Imposition of 10 per cent Basic Duty on HS 90.27 & HS 30.06 (mainly Diagnostics – equipment & reagents)

(C) Education of duty on raw materials to produce these devices and diagnostics to 2.5 per cent. This is in line with recent announcement done for some medical devices on January 19.