Budget 2022: What does the industry want?

Healthcare sector is the top most priority all across since the starting of the pandemic. Below are the industry expectations for healthcare sector from this year’s budget:

Invest in technology to bridge the rural-urban divide in healthcare

Sharing his expectations, Dr H Sudarshan Ballal, Chairman, Manipal Hospitals said:

• Increased allocation for healthcare since we still have a lot of ground to cover in our expenditure on healthcare
• Spend on strengthening our primary healthcare system which is the backbone of healthcare in India, public healthcare, preventive healthcare in addition to nutrition in children, and aggressive vaccination campaigns to include COVID-19 vaccination for all
• We also need to strengthen the public healthcare system by upgrading the infrastructure and personnel at government hospitals
• Specifically, strengthen pediatric care, and pediatric intensive care, along with setting up of training programs and teams of intensive care doctors in government hospitals including in adult intensive care
• Invest in more diagnostic labs across the country which was a necessity during the current pandemic
• Set up more medical colleges especially in underserved areas and upgrade district hospitals to be the teaching hospitals for these colleges
• Invest in technology to bridge the rural-urban divide in healthcare and make healthcare available for all in the country by expanding our universal healthcare schemes

Training, and medical infrastructure needs to be nurtured

Highlightening the need for more focus on training and skill development, Ameera Shah, Promoter and Managing Director, Metropolis Healthcare said, “While we still battle the mutations to the COVID-19, I believe that the upcoming budget might comprehensively cater to healthcare sector. R&D in India and around the world has been ever developing solutions to address the existing issues and has been preparing for the anticipated ones. Technological intervention has increased digital and home-based healthcare ecosystem ensuring a reliable healthcare solution for the nation. However, training, and medical infrastructure needs to be nurtured. The Centre’s current expenditure on healthcare is estimated at 1.2 per cent of the GDP (as per National Health Accounts, 2016-17) and envisioned to touch 2.5 per cent by 2025. And I believe that strong investments in healthcare can help buoy the nation’s economy.”

Gerald Jaideep, CEO, Medvarsity Online added, “It is expected of the government to make a stronger allocation to the health space with the upcoming budget. While the efforts are really admirable, one of the major gap areas that have resurfaced prominently due to the pandemic is the continuous education and training of the healthcare workforce. Access to quality educational material and avenues of learning are few and remote for the majority of healthcare professionals in the country. This gap can be filled by leveraging online education technologies specially designed for the healthcare industry. While the Government has launched the National Digital Health Mission, it would be a boost to the entire healthcare ecosystem if the healthcare ed-tech segment gets integrated with the mission. Furthermore, the sector hopes that finance minister will make focused budgetary allocation for the healthcare ed-tech industry or incentivise the sector through innovative fiscal policies. We also hope that the government would create an across-the-board collaboration opportunity for healthcare and ed-tech partners to create rich course curricula and learning material for healthcare professionals while incentivising them to pursue the programs.”

KR Raghunath, Senior Chairman, Jindal Naturecure Institute added, “The need of the hour is to spend more on creating awareness about why preventive healthcare is important, more so with the ongoing COVID-19 pandemic. Even though COVID is a communicable disease, its worst effects are visible in those with non-communicable diseases– cardiovascular diseases, diabetes, hypertension, obesity and chronic respiratory diseases. Therefore, an allocation only for strengthening communicable disease surveillance is a sub-optimal solution. The budget for up-skilling of the youth to become Preventive Health Coaches is also required since this will address the problem of unemployment and build on PM Modi’s Atmanirbhar mission. We need to consider coming out of this pandemic as a healthier and fitter country.”

Anand Narasimhan, MD, Merck Specialities added, “The last two years of the pandemic has given us a reality check on the urgent need to build a robust healthcare system. One of the most effective solutions to mitigate the current challenges would be enhancing access to affordable healthcare, that will require building a solid healthcare ecosystem and strong leadership from the pharmaceutical industry. Investment in innovation, infrastructure and R&D would be key parameters for the success of this mission. Increasing the scope of health insurance coverage will help reduce health expenditure by securing a large part of the hospitalization expense. Simultaneously lowering the GST rate on life-saving medicines and pharma drugs would be a welcome move. Further, an upskilled workforce will form the backbone of the pharma sector, ready to cope with any unforeseen challenges. The healthcare sector looks forward to enhanced collaboration with the government to be recognised as a priority sector to deliver high quality and affordable healthcare’.

Joy Chakraborty, COO, P. D. Hinduja Hospital & MRC said, “Availability of skilled manpower remains a key challenge. The government should expedite the implementation of setting up of medical colleges announced in the earlier budget. To encourage the private sector to take up workforce skilling activities, the government should consider providing tax incentives for expenses incurred healthcare skill development and tax deduction on stipends to professionals undergoing DNB and PG courses at hospitals.The government should encourage entrepreneurship and start-ups with funding and mentoring, to help develop innovative solutions and newer healthcare delivery models, which is the need of the hour. To strengthen the private sector’s health infrastructure, the government should consider offering deductions to healthcare providers for capital investments incurred for fighting the pandemic. There needs to be a stronger collaboration between public and private sector to build more primary healthcare infrastructure. The facilities in public sectors hospitals in smaller towns must be upgraded so that they have adequate supplies of oxygen, ventilators etc”

Remove GST on healthcare service providers & digital health companies

Shyatto Raha, Founder and CEO, MyHealthcare said, “As of today, medical practitioners, clinicians and clinical establishments such as hospitals, clinics and labs are exempted from GST. Start-ups and health tech companies like MyHealthcare, who are working towards using technology in making healthcare delivery available to a wider population continue to come under the purview of GST. This burden increases the cost of healthcare for our patients across India. COVID 19 has brought out how stressed our healthcare system is in India, it has also been proven that digital healthcare or technology-enabled healthcare delivery has become a primary channel for patients to access quality healthcare. Health tech companies have worked hard to bring effective solutions more accessible. In the upcoming budget, we would hope and request the government to remove GST on healthcare service providers & digital health companies directly involved in the process of care delivery. This would help relieve a whole lot of financial burden on us, allowing us to deliver quality & more affordable healthcare to our patients across the country. This would be more than welcome at a time when our country is going through the 3rd wave of the pandemic.”

Boost to the Ayurvedic Healthcare ecosystem

Ram N Kumar, Founder and CEO, NirogStreet said, “As we enter the third year of pandemic, it is evident that nurturing the health ecosystem has become an immediate priority especially preventive and immunity building. Also, it has to be acknowledged that the dream of Universal Health Coverage is impossible without mainstreaming of Ayurveda healthcare. So, there is a need to support, encourage and accelerate accessibility to authentic doctors, good quality medicine development, modern technology solutions and digitization in this field. For the past few years, the Government of India has done a lot to promote Ayurveda. Still a lot needs to be achieved and fast. The right provisions in the Union Budget would give boost to the Ayurvedic Healthcare ecosystem. Waiving off or reduction in GST from the current 12% on Ayurvedic medicines would promote the consumption of natural medicines and sustainable healthcare. Allocation of budget for overall development of a future ready healthcare ecosystem which has world class Ayurvedic medical research, development of world class institutions, development of innovative technology solutions and; medicine research and development is desired. We hope that the Union Budget would include focused approach towards accelerating the development of holistic Ayurveda science.”

Increase in customs duty for finished medical equipment/devices

Sharing his expectations, Dr GSK Velu, Chairman & Managing Director, Trivitron Healthcare and Neuberg Diagnostics highlighted:

• Tax break for 10 years for setting up facilities in upcoming economic zones, MedTech Parks & MedTech Manufacturing facilities, similar to the tax break given for Pharma – API facilities at Baddi, Himachal Pradesh.
• Increase in customs duty for finished medical equipment/devices. Reduction in customs duty for components and SKD imports to promote manufacturing in India.
• Government grants to support R&D and manufacturing facility setup for important medical equipment like IVD instruments, cath lab, CT scanners, MRI scanners, ultrasound, patient monitor, ventilators etc.
• Tax breaks and incentives for private healthcare infrastructure creation in tier 3 & 4 towns. This will enable the healthcare reach to the deepest level in the country.
• Increase in Income Tax Exemption limits for medical insurance. In view of the COVID pandemic, the insurance companies have increased the premium and in view of the above the Insurance premium Tax Exemption Limits have to be appropriately increased for all classes.
• 1 to 2 per cent GST for health services to avail GST input credits by health services industry. GST has to be reduced significantly across all products and services, to spur consumer spending. Healthcare services have to be brought under GST regime with 1 per cent levy so that they are able to avail the input credit available, which go as waste now, resulting in higher cost of services. If this is done, the overall cost of healthcare services will actually come down benefitting larger section of the people.

Satyaki Banerjee, CEO-Medical Imaging, Trivitron Healthcare said, “By 2025, we expect the government to increase the public investment from 1.29 per cent of GDP to at least 2.5-3 per cent. There is much more room for the medical device industry to flourish, since it has a diverse ecosystem, including stakeholders from academia and government. Currently, India is among top 20 markets for medical devices globally. The market is expected to increase at a 37 per cent CAGR to reach $50 billion in 2025. However, India currently imports ~80 per cent of medical devices requirements. We are looking forward to the government’s improved reform plans in this budget. More emphasis should be placed in facilitating manufacturing in the country. Since the medical device industry is still in its formative stages, establishing an efficient ecosystem is vital to the field’s long-term success. More medical device parks should be built because they establish a robust and cost effective ecology for the country’s medical device industry. To boost domestic manufacturing of medical devices and make India self-reliant, the government to increase the total outlay allocated to the PLI Scheme (Production –Linked Incentive). Preference should be given to products manufactured in India in public procurement.”

Chander Shekhar Sibal, Senior Vice President, Medical Division, Fujifilm India said, “We’re looking forward to building and balancing the country’s healthcare infrastructure with government’s support as we enter the third year of the pandemic. We hope that the budget delivers a special focus on healthcare to mitigate the devastation from the coronavirus. For this, it will be pertinent to have concrete policies that ensure accessible and affordable healthcare. It would be great to see the allocation of funds within the states as per policy. The timeline of fund clearance should be reduced to clear roadblocks due to lack of funds. Once these are in place, we can expect better outcomes out of public-private partnerships in the space and make payment processing easier and quicker.”

Dr Veeraal Gandhi, Chairman and Managing Director, Voxtur Bio said, “In the upcoming budget, the government needs to propose incentives and tax benefits on investments by IVD manufacturers. Moreover, to make the IVD industry self-sufficient, advanced, and productive, the government should incentivise technology adoption. The budget can propose subsidies on technology imports from developed countries to facilitate the fast-paced growth of the domestic IVD industry. It can also propose a framework for an effective public-private partnership (PPP) model for cost-efficient technology transfer. In addition, the budget needs to relook into the tax liability on the IVD sector to ensure the delivery of affordable healthcare. The IVD industry has a huge export growth potential thanks to the growing adoption of point-of-care tests and a shift in the healthcare outlook across the world from illness to wellness. So, the government needs to create an enabling environment for the domestic IVD solutions manufacturers to help them invest in R&D and enhance export competitiveness.”

Anand. K, CEO, SRL Diagnostics added, “The government could look at reducing the high custom duty on the import of diagnostic equipment and kits. This 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 also look at collaborating on public private partnerships. 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.”

Ashok Patel, CEO and Founder, Max Ventilator said, “Apart from the need to raise the share of healthcare as a proportion of GDP to at least 2.5 percent in the upcoming budget, the government must also further build on its earlier policy incentives such as PLI schemes and dedicated medtech parks by increasing allocations. In fact, the government should ensure that the smaller medical device players also get included and can benefit from the special schemes and offers that it has extended with a view to catalyse domestic manufacturing and to achieve the larger goal of self-reliance. Given the repeated occurrences of infectious diseases of epidemic scale in recent years, the government should also invest sufficiently into genetic and genomic research, epidemiology and vaccine research besides increasing allocation for broader healthcare R&D. Of course, the diagnostics and preventive health device segment must be given as much policy and financial support as possible. Further, the budget could also incentivize the consumables as well as medical device accessory segments which hold huge promise for the domestic sector. At the same time, adequate allocation must be made for training of personnel required for the deployment and usage of critical care equipment such as ventilators and other similar lifesaving devices.”

Sharing his expectation for medtech sector, Anish Bafna, CEO & MD, Healthium Medtech added, “As we gear up for the budget of FY 2022-23, the expectation is high in terms of research and development push to the medtech and devices sector in terms of incentivisation and tax holidays for a period of 10 years to be provided on the spending on research. There is also a need to increase the export incentives under the newly introduced Remission of Duties and Taxes on Export Products Scheme (RoDTEP), rationalisation of Custom Duty, roll back health cess on imports of medtech products and amendment of SEZ Act to allow SEZ medtech manufacturers to sell their produce in the domestic market. Facilitating of single-window clearances for government approvals for the local companies, rebates on costs related to product registrations in foreign countries and keeping exported products outside the purview of price control will together contribute to a more significant push for exports.”

Dr Angeli Misra (MD Path), Founder & Director, Lifeline Laboratory says, “To combat the pandemic crisis, increased fund allocation in every aspect of the healthcare sector, a reduction in GST and import duty for critical care equipment and components (86 per cent of which are dependent on imports) as an initiative for government support for the medical devices manufacturing industry, more funding to boost the development of the digital health sector and the production of point-of-care equipment can bring the highest level of quality care to the interiors and remote areas of India. In addition, the establishment of more medical education institutions and imparting of advanced training to enhance the skills of healthcare workers is of considerable significance and the need of the hour.”

Dr Gauri Agarwal, Founder & Director, Genestrings Diagnostic and Seeds of Innocence added, “During the pandemic, medical diagnostics emerged as the first line of disease containment and the most important public health measure. The World Health Organization’s T3: Test. Treat. Track. initiative to combat COVID-19 has brought diagnostics to the forefront, emphasising the growing need for better testing capabilities and the importance of quality. People have begun to understand the importance and needs of molecular/genetic testing, and it has invariably resulted in increased investments by large private labs and establishment of more RT PCR labs across the country. In this sense, the government’s collaboration with the private sector, while refocusing on life science, healthcare, and diagnostics, will play a critical role in deciding the future of diagnostics in the country.”

Dinesh Chauhan, CEO, CORE Diagnostics said, “The healthcare sector witnessed a worst hit amidst COVID-19 pandemic, thereby, driving the need for a contingency plan towards recovery and revival of the nation. Although healthcare has been a part of country’s development plan with comprehensive initiatives like Ayushman Bharat, National Digital Health Mission, Swasthya Suraksha Yojna and Mission Covid Suraksha and more, there is a need to allocate additional funds that would ensure universal health coverage to all, especially underprivileged. While it was aptly reflected in the Union budget 2021 which demonstrated deep commitment towards the sector however, there is a lot more to be done. The pandemic has restored the fact that there is an urgent need to bolster innovative, tech-based, large-scale, and affordable healthcare solution in India to ensure quality treatment and cure, especially with the occurrence of the new variants. This requires significant investments in funding research and development sector, which ultimately need public-private partnership push to capture greater space in the heath sector. Lastly, we expect the budget to bring in incentives to enable rapid growth of the sector, in addition to helping more people to get preventive screening and testing done at early stage.”

Jesal Doshi, Deputy CEO, B Medical Systems added, “One of the expectations is for increased allocation in the healthcare sector – across the entire infrastructure, specifically for immunisation. COVID-19 is far from over and it is vital that the country is well prepared to fight the pandemic and any future pandemics, and a reliable medical cold chain is critical for the success of any immunization program. We believe that creating a sub-industry for medical cold chain and separating it from commercial refrigeration, along with reduced GST rates could further boost the sector. The government should reduce import duties on critical components that are essential for manufacturing reliable medical cold chain units. This, along with production-linked incentives will help improve the country’s ability to access world-class medical cold chain products and also improve India’s export competitiveness in this industry.”

Sushil Pasricha, Partner, Bain & Company added, “In pre-COVID era, healthcare expenditure was 1.35 per cent of GDP which is very low compared to other similar economies and COVID-19 has exposed several gaps. In upcoming budget, the expectation should be increased to 2 per cent of GDP, in line with National Health Policy of 2017 (2.5 per cent of GDP in 2025).”

The government should make health insurance applicable for telehealth services

Stressing on the need to to create and build infrastructural and linked integrated capabilities like telemedicine, home and senior care Dr Harsh Mahajan, President, NATHEALTH said, “In the wake of COVID-19 pandemic, it is crucial to create and build infrastructural and linked integrated capabilities like telemedicine, home and senior care so that people can access quality and critical healthcare services equitably. The pandemic has made us realise the need of providing hospitals in tier 2 and 3 towns with adequate infrastructure such as diagnostic centers, oxygen beds, ICUs and oxygen plants through increased budget outlay and greater investments. This will also help in creating employment opportunities and increase health system resilience. The need of the hour is to allocate funds and introduce targetted skilling and medical education programmes which can address the shortage of skilled healthcare manpower in the nation. The sector has not been able to derive the benefits of GST transition. In fact, the embedded taxes in the sector have increased in the post-GST regime compared to pre-GST scenario. Therefore, it is vital to rationalise GST to unlock the embedded credit which is trapped in the healthcare value chain.”

“The PM ABHIM scheme will help to strengthen public health infrastructure in 10 high-focus states. It will help in critical care facilities and primary care in both urban and rural areas, thus enabling the private sector to explore linkages to improve healthcare delivery in the nation. The objective of these recommendations is to build a sustainable healthcare model which will ensure quality healthcare services to all, while offering incentives to private healthcare organisations to increase investments in the sector. These recommendations also aim at supporting the recovery and sustenance of healthcare providers (small, medium, and large) and to drive the policy consensus. The path to achieve a holistic goal of universal healthcare largely depends on collaboration where all stakeholders can work in unison to assist in healthcare service delivery”, he added.

Mythri Macherla, Assistant Vice President & Sector Head, Corporate Sector Ratings, ICRA added, “At ~Rs 74,602 crore, the budgetary allocation for healthcare in FY2022 dropped by 9.8 per cent, if compared to the Revised Estimates for FY2021. The funds earmaked for healthcare, as a percentage of GDP and beds per 10,000 population, continues to be lower for India against most developing nations. Given the ongoing pandemic, ICRA expects a sizeable increase in grants to the sector in the forthcoming budget. Higher allocation is also necessitated to enable the Government achieve its target spend of 2.5 per cent of GDP on healthcare by 2025, from the current sub 1.5 per cent levels. With resurgence in Omicron cases, ICRA expects partial cost towards children’s vaccination and booster shots for the adult population to be a part of the upcoming budgetary allotment towards the sector. To boost investments in the sector, tax incentives for private sector investments in modernising medical facilities and developing greenfield hospitals will be a welcome step. Further, considering the low doctors to people and nurses to people ratio (aggregate density of health workers is 23 per 10,000 population, which is significantly lower than that recommended by WHO), increased allocation towards training medical personnel, in addition to improving infrastructure in tier-2 and tier-3 cities, would be a favourable move.”

Vikram Thaploo, CEO, Apollo Telehealth added, “India is combating a massive global pandemic with its resources available in the health sector. The health sector is expecting more specific allotments in this year’s budget to mitigate COVID-19 and help in the growth of the telemedicine sector. The telemedicine segment is growing at a rapid pace and in the future, we are expecting more technological innovations to take place in the industry therefore, the budget should be well allocated to the healthcare sector to initiate new innovations to be prepared for the fight with pandemics like COVID-19 in the future. It is important especially in a country like India where digital health can truly provide care to areas with short supply of doctors. Increased allocation of budget for promotion of telemedicine, home-based healthcare and national digital health mission implementation will help in building a strong healthcare ecosystem in the country. Telemedicine has potential to improve access to healthcare in remote and rural areas. Home-based healthcare will reduce burden on limited healthcare facilities. Digital Health along with various innovations should be encouraged for India’s future growth in population health. The government should also support private players and startups in this segment to increase the current coverage of the locations including tier-2 and tier-3 cities to provide the advanced healthcare facilities in these areas.”

Sharing his expectation for health insurance sector, Darpan Saini, CEO, Phyt.health said, “Medical expenses have increased over the past two years with COVID taking center stage. Many have lost jobs or have taken pay cuts, resulting in financial stress on families. To ease these problems, the government needs to make digital healthcare affordable. A special focus on making health insurance affordable by reducing GST on premiums from 18 per cent to 5 per cent is a viable option. The government should make health insurance applicable for telehealth services such as doctor consultations or online physiotherapy to help patients recover from the comfort of their home. This is crucial for patients who can’t visit a doctor due to COVID restrictions. Moreover, the FM could also look to increase the limit of deduction under Section 80D from Rs 50k to 1 Lakh – This could help the common man combat the rising healthcare costs.”

Increase health insurance age limit for senior citizens, include provisions to increase coverage, irrespective of existing medical illnesses

Sharing his expectations for elder care service industry, G. Srinivasan, CEO, Athulya added, “The changing dynamics of the healthcare industry post the outbreak of COVID-19 has elucidated the need for enhancing the skills of existing healthcare workers to facilitate better service. Hence, initiatives to motivate youngsters to take up a career in the healthcare industry and to include continuous development programs in their curriculum to enhance their skills will address the current demand for healthcare professionals. To help our senior citizens meet the rising cost of medical treatments we would request to increase the health insurance age limit for senior citizens and to include provisions to increase the coverage, irrespective of existing medical illnesses. To increase the support and guidance given to start-ups, in the form of incentives towards building and developing healthcare technologies that would aid in early detection, monitoring, screening and diagnosis of health ailments. This will reduce our dependence on international companies for the same. We would also expect the government to considerately reduce the taxes imposed on medical equipment that are very essential, which will result in bringing down the overall medical expenses for an individual with ailments and comorbidities. Eventually, helping our senior citizen community to fight the potential escalations in their medical bills. And finally, to increase the tax benefits against their medical expenses and to revise the existing deduction for senior citizens as the cost of living has increased.”

Rajit Mehta, MD and CEO, Antara added, “India does not have a universal pension program for its 1.4 billion people. Most seniors rely on their personal savings for meeting more than 46 per cent of their retirement expenditure. This mismatch clearly outlines an inadequacy and the critical need to streamline and strengthen the pension programs in the country. The Union Budget 2022-23, which will be presented against the backdrop of the COVID-19 pandemic should take into consideration the financial needs of India’s growing senior population and recommend policy measures to help them have income security in their silver years. It should also consider the inclusion of care-at-home services and assisted living facilities under the mandate of health insurance. This will be a crucial step in building a well-rounded senior care ecosystem in India, given the fact that the demand for dependable, specialised, and professional senior care services has witnessed a steady rise, especially after the second wave.”

Dr Vispi Jokhi, Chief Executive Officer, Masina Hospital added, “The expectations from the union budget for the healthcare sector relating to an increase from 1.8 per cent in the outlay of the budget to at least 2.5 per cent of the GDP this year. This has become an oft repeated demand. In view of the state of health care following the devastating effect of the COVID pandemic some concessions to the industry are in order. These relate to relaxation of norms for treating indigent and weaker section patients free of cost and at heavily subsidised cost. The 2 per cent to be set aside for this purpose should be reduced. The cost of compliance relating to fire safety norms and other infrastructure norms need to be reduced by providing special pricing for equipment relating to the same for hospitals. Going forward a policy to deal with pandemics in the future must be formulated where a consultative approach on public-private partnerships is to be adopted.”

Budgetary impetus to develop the innovation ecosystem, support for industry’s R&D efforts and increasing the healthcare expenditure

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