Over the last few years, healthcare sector has received adequate attention in the Union Budgets. This year also, we anticipate that the government will introduce measures to improve the quality of healthcare and make it more affordable. The major expectation is for increased allocation of budget to the healthcare sector. Healthcare expenditure and investment should be increased to 2.5 percent from current spending of 1.25 percent of GDP.
More focused efforts are required to ensure India’s transition from an importer to an exporter in medical devices sector. The government should consider increasing export incentives under RoDTEP to 2 percent from the existing 0.5 percent, to encourage exports from India and also help companies to become more competitive in global markets.
Government should allow extra depreciation of 15 percent on CapEx investments above Rs. 25 crore PA for next three years for existing companies to push new investments. This will not only reduce the tax burden for existing companies but also spur demand of capital goods. Currently only new companies are entitled for reduced tax rate of 15 percent.
To boost R&D in medical technology sector, government should restore 200 percent weighted tax deduction against R&D expenses since it is critical for new technology development and innovation.
Medical devices and equipment sector has 3 slab rates of GST-5 percent, 12 percent, and 18 percent. This should be harmonized to a uniform rate of 12 percent.
Product/category specific industrial zones/ parks with common infrastructure can give impetus to medical device manufacturing.
Although current attention is on Covid-19 pandemic, it is equally important to increase the proportion of expenditure on preventive healthcare and wellness. This will help ease the burden on existing healthcare infrastructure of non-communicable and lifestyle diseases.
There is a severe shortage of skilled manpower in the country. Extra funds must be allocated for skilling and up-skilling of clinicians, nurses, paramedical staff, and other care providers. There is a need to set up new medical colleges and nursing schools, and incentivize them.
Hope healthcare finds its due for the deserved growth, in the upcoming budget.
The author is Chairman, NMTF, CII, Managing Director, Poly Medicure Ltd.