Union Budget 2024: Mixed reactions from healthcare and medical industry experts

Jyotsna Govil, Chairperson of the Indian Cancer Society:

“Our Finance Minister Nirmala Sitharaman has relieved the cancer patients by announcing the cancer treatment medicines. The exemption of customs duty on three cancer medicines is a significant step forward. Also, the initiative and public investment in digital infrastructure and innovations will vastly improve access to essential health services for people in Tier 2, Tier 3 and rural areas. The government’s commitment to healthcare will provide the much-needed support to countless cancer patients across the country.”

Shamsher Dewan, Senior Vice President & Group Head – Corporate Ratings, ICRA :

“Budgetary allocation towards healthcare increased by 13.0 per cent for BE FY2025 BE from RE FY2024. Given the backdrop of under-penetrated healthcare infrastructure in the country, increased budgetary allocation towards the healthcare sector is a welcome move. Exemption on customs duty for three more cancer drugs will make the associated treatments more affordable, thus benefiting the patients and the healthcare ecosystem. Reduction/exemption in customs duty on raw materials used in medical devices and implants is expected to reduce costs for medical device manufacturers. ~7.4 per cent increase in allocation towards the Ayushman Bharat scheme reaffirms the government’s focus on national health protection and is expected to increase patient footfalls for healthcare companies.”

Pavan Choudary, Chairman, Medical Technology Association of India (MTaI) : 

“The budget harnesses both the domestic and international currents to optimally forge the path ahead. This ambition is logical as India has 18 per cent of the world’s population but only 5 per cent of the world’s wealth and technology. The West and Japan together have 15 per cent of the world’s population but have 70 per cent of the world’s wealth and technology! So, the policy makers haven’t ignored such a big reservoir of Capital and technology and that is why the emphasis on FDI facilitation. Coming to MedTech, it is FDI which brings most of the investment in the sector and it scaled a new high of USD 502 million in 2023.

As healthcare skilling benefits substantially from the government’s overall emphasis on skilling, this is a welcome focus area too. Healthcare skilling helps us tap the lucrative global market as well. Currently a whooping 24 per cent of foreign workforce in healthcare in the world is from India! And the government targets exporting 300,000 Healthcare Workers (including doctors, nurses, technicians) annually. Train in India for the world, needs international MedTech’s engagement and we stand ready to provide it.

Customs duty reduction on finished goods is a pending demand. Even though that has not happened, the reduction of custom duty on X ray machine components is perhaps reflective of the realisation that only those products which we can manufacture in the short to mid-term can be protected without triggering adverse unintended consequences. We do hope that tariff barriers on finished MedTech products which are not import substitutable in the short to mid-term, will eventually, come down. This would further patient affordability and foster competition and quality.”

Siddharth Gadia, Co-Founder, Zeno Health:

“For the healthcare sector, the government did announce an exemption for three more medicines for cancer treatment as well as for the manufacturing of certain medical devices from customs duty. But the Budget missed out on a few key announcements. We would like the government to look at incentivising R&D for new medicines and medical devices. Aside from this, we hope the government will enforce a law requiring doctors’ prescriptions to include drug names rather than specific brands. These changes can certainly help the country move towards a Viksit Bharat. We hope the government could take this into consideration in the coming months.” ( excerpts 

Gautam Khanna, CEO P. D. Hinduja Hospital; President, Association of Hospitals, Mumbai and past Chair, FICCI Health Services:

“While the finance minister’s union budget speech had comprehensive proposals on issues like job creation, manufacturing, power and infrastructure development, there were relatively fewer announcements for healthcare. The exemption of customs duty on three additional cancer medicines showcases a commitment to improving affordability and access to critical treatments, potentially alleviating the financial burden on patients battling this challenging illness. Concurrently, the synchronisation of Basic Customs Duty on X-ray equipment components with domestic manufacturing capacity demonstrates a nuanced approach to supporting local production while ensuring healthcare providers can access cutting-edge diagnostic tools. The initiatives to boost start-ups like angel tax abolition with help the development of new-age health-tech ventures, which have the potential to provide innovative healthcare delivery solutions.

 Additionally, the announcement of setting up a medical college in Bihar is a welcome move, however, we would like to see faster implementation of this and similar proposals to set up medical colleges and nursing colleges announced in the previous budgets. There were however no big measures to boost the healthcare sector as a whole like GST, incentives for infrastructure development, health insurance, faster implementation of national digital health mission etc. 

Overall, the Union Budget overall is an extension of the Interim Budget announced earlier and we need to study the fine print and details for execution of the schemes and initiatives announced earlier and to analyse the impact on the healthcare industry.”