Finance Minister, Nirmala Sitharaman on July 5, 2019 presented her maiden Budget in the Parliament. She committed that the Indian economy will grow to become a 3 trillion dollar economy in the current year. It is now the sixth largest in the world. She said in her speech, “Five years ago, it was at the 11th position. In Purchasing Power Parity terms, we are in fact, the 3rd largest economy already, only next to China and the USA”.
Healthcare may have got a passing mention in the Budget 2019 , but allocation to the sector has jumped 15.4 percent to Rs 62,659.12 crore for FY20, compared to previous year’s revised budget.
To be sure, the budget hike wasn’t due to Pradhan Mantri Jan Arogya Yojana (PMJAY) or Aysuhman Bharat Scheme. In fact, the budgetary allocation for PMJAY remained the same as the interim budget’s allocation of Rs 6,400 crore in February this year.
PMJAY provides an insurance cover up to Rs 5 lakh per family, per year for secondary and tertiary hospitalisation, benefiting over 50 crore poor families. The scheme was launched in October 2018.
The area that saw an increase was the allocation for the National Health Mission (NHM) that spiked 8 percent to Rs 32,995 crore. NHM covers most of the Central sponsored schemes related to healthcare.
Under NHM – the Health and Wellness Centres got 33 percent higher allotment. The budget allocation for Health and Wellness Centres in Budget 2019 for both rural and urban areas stood at Rs 1,600 crore.
Health and wellness centres focused on primary care provide comprehensive health care, including for non-communicable diseases and maternal and child health services. Besides, these centres also provide free essential drugs and diagnostic services.
The allotment is in line with the BJP’s manifesto that mentions about its ambitious programme to set up 1.50 lakh Health and Wellness Centres (HWCs) by 2022.
Till date, 17,150 HWCs have become functional.
The National AIDS and STD Control Programme also saw 30 percent jump to Rs 2,500 crore allocation in Budget 2019.
The Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), the agency that’s spearheading the creation of All India Institute of Medical Sciences (AIIMS) like teaching hospitals in under-served areas of the country also got a decent allotment.
PMSSY saw the allocation jump to Rs 4,000 crore in the FY20 budget. Family Welfare Schemes also got a 35 percent higher allotment in the budget.
The government also spoke about setting up a National Research Foundation to boost research in all areas, which could benefit pharma and healthcare sectors as well.
Some responses from the industry
“Reduction in Customs duty of Medical Devices in the Union budget would have furthered the government’s objective of increasing Healthcare affordability and accessibility, which, through Ayushman Bharat it is already trying to achieve. The increase in the turnover limit to INR 400 Crores under the 25% tax slab is in line with the government’s commitment in the Union budget 2015 to make Indian companies more competitive on the global business platform. This will also lead to increase in compliance and also attract more investment to India”
Pavan Choudary, Chairman and Director General, Medical Technology Association of India
“We at AIMED are shell shocked to see that No action has been taken by the Govt. to stem the tsunami of imports of 24% at 38800 Cr Rs that’s crushing Indian mfg.” It is appalling to notice that since last 3 years, it is the first budget with zero mention on healthcare not even higher allocation for Ayushman Bharat.”
Rajiv Nath, Forum Coordinator, AiMeD
“The Budget has addressed expectations in the area of enhancing healthcare coverage to the Indian citizens through Ayushman Bharat. Consolidation of grants into the National Research Foundation will hopefully enhance medical research. The medical device industry will stand to gain on account of the reduced customs tariff and increase in the turnover threshold to INR 400 crore for the corporate tax rate of 25%.”
Amit Kumar Bajaj, Partner, Grant Thornton India LLP
“In line with the Ayushman Bharat program, India has taken a number of initiatives towards equitable and affordable access of quality healthcare for 1.3 bn Indians. But it cannot be made affordable if India continues to import 70-80% of its total requirement of medical devices. While the overall approach and budget allocation to address healthcare by the current government has been positive, unfortunately there is nothing much to boost Make in India.”
Suresh Vazirani, Chairman & Managing Director, Transasia-Erba Group
“The expectations from the Union Budget 2019 were that of a bold reformist budget, however, it turned out to be an incremental budget at best. The emphasis on start-ups and on the education sector is a good move. However, there was nothing to fuel growth in the healthcare and pharma sectors, which is disappointing. I was particularly keen on seeing a change in the weighted deduction for R&D which did not happen. A positive policy move of this kind would have spurred R&D and innovation in pharma and other sectors.”
Satish Reddy, Chairman, Dr. Reddy’s Laboratories Ltd
“The 2019 budget celebrates the spirit of entrepreneurship in India, with a number of provisions for startups and MSMEs. Whether it’s organizing a Global Investors’ Meet to boost entrepreneurship or resolving taxation issues, there are significant incentives for new-age companies. In addition, the budget’s emphasis on training millions of youth in industry-relevant skills like AI, IoT and Big Data will help address demand gaps for trained technology professionals across industries. A key tenet of this year’s budget is the renewed emphasis on inclusion of Research & Innovation in the National Education policy; and the proposal to set up a national research foundation to assimilate research grants from various ministries. As a startup in the field of deep tech and science, we understand the significance of building R&D from the ground up and welcome the Government’s support in this. We are confident of its long-term impact and predict a rise in innovation and creativity, boosting entrepreneurship further and putting India at par with global counterparts.”
Swetabh Pathak, Co-Founder, Elucidata
“This budget does not seem to have addressed the healthcare sector directly. Opening up of the insurance sector to FDI may benefit healthcare. The fine print may have something though. Else, status quo it is!”
Dr. Deepak Balani, Chief of Medical Services at Sakra World Hospital Bengaluru
“Focusing on gender equality, she mentioned that India’s tradition is now focussing on “Nari tu Narayani” (Women, you are a Goddess). She mentioned that the role of women particularly in rural economy has been a golden journey and golden contribution. She also welcomed a broad-based committee to evaluate and suggest actions on women empowerment and development. Instead of just formulating policies for women development, the inclusion of building women-led initiatives is an appreciable move. Women SHG interest subvention program proposed to be expanded to all districts. Overdraft for women-led Self Help Groups (SHG) and easy access to the loan is going to support women entrepreneurship to a great extent. The government wishes to encourage and facilitate the role of women in India and this is going to a major driving factor for women to capitalize on their entrepreneurial aspirations. Startups and the investors will not be challenged on the valuation of angel tax and this initiative is going to build a strong startup system. The issue of establishing of the identity of the investor will be resolved by an e-verification (faceless income tax assessment). A lot of relief from the income tax department for startups is going to boost and encourage young entrepreneurs. This will remove the element of discretion for startups. Another big move is to initiate “Study in India” move encouraging academic globalization within India. This along with Pradhan Mantri Kushal Vikas Yojna is going to make our youth ready to support economy strongly”.
Moonmoon Agarwal, Co-Founder and Director of Nmami Life
“The Union Budget 2019 presented by Union Finance Minister, Nirmala Sitharaman has concentrated more on the vision for the growth and welfare of the country. Although the healthcare sector has not been discussed much during the Budget, sanitation, hygiene, potable water have been given importance in order to create a cleaner and healthier society. The Government, through Ayushman Bharath Yojana, aims to concentrate more on the all-round nourishment of women and children and wants our citizens to consider taking care of their health in a more serious way. Preventive healthcare is a major issue that is mostly ignored by people, who end up visiting clinicians only when diagnosed with a medical disorder. Therefore, in order to make people consider investing on their health and personal welfare, the Government has increased the tax deduction of medical insurance from Rs 15,000 to Rs 25,000.”
Col Hemraj Singh Parmar, Group CEO, BR Life Hospitals
“The Budget 2019, is paving the way for a brighter future for India’s start-up ecosystem with easing of the angel tax thereby ensuring more entrepreneurs join the start-up bandwagon. The idea to have a separate channel for start-ups under the aegis of Doordarshan will help disseminate critical information on a real-time basis to budding entrepreneurs in the tier II and III markets particularly thus enabling them to help realise the Government of India’s vision of becoming a USD $3 trillion economy this year. Also, since GOQii’s inception in 2014, the company has supported the ‘Make in India’ movement and has been striving hard towards making India a healthier nation through our continuously evolving and innovative preventive healthcare offerings and initiatives. The Government of India’s commitment to expand Khelo India scheme for the development of sports and sportsperson is a very welcome move; it will encourage more Indians to take up sports and be the torchbearers of health and fitness. Also, the insure-tech industry will benefit with 100% FDI being permitted for insurance intermediaries in India. This will enable the insurance market to grow. As per recent EY’s Global Insurance Trends Analysis 2018, $2.3 billion has been invested into insurtech startups, representing over 45 percent of insurance investments spanning 2012-17. Insurers are using technology that assesses health risks and for diagnostics. This technological developments along with assistance from AI and ML will make insurance and technology, weave a better and more informed future for healthcare and smart preventive healthcare.”
Vishal Gondal, Founder & CEO, GOQii
“The budget this time focuses primarily on sustainable growth and infrastructure. The decision to invest Rs 80,250 cr for the development of 1,25,000 km of roads under PM Gram Sadak Yojana Phase III is a great initiative, which will improve rural connectivity tremendously and enable emergency medical service providers like ourselves to reach the remote corners of the country. While the government laid a lot of emphasis on cleanliness and sanitation, we were hoping to see reforms in the healthcare sector. One of the points overlooked in the Union Budget 2019 is the lack of impetus for the emergency medical services sector. Our foremost request to the government has been to accord due recognition to the emergency medical services (EMS) industry and recognise it as an independent sector within the healthcare industry. We are hopeful that the next meeting of the GST council may bring some tax relief to the industry”
Manish Sacheti, CFO, Ziqitza Heathcare Ltd.
“While the healthcare allocation had been covered in the Interim Budget earlier this year, it is still a little disappointing that there was no new commitment to healthcare in Finance Minister Nirmala Sitharaman’s maiden budget. However, one of the most notable announcements in the budget has been the pledge to establish a National Research Foundation to boost research in all areas. We hope the government will allocate significant resources through this body towards boosting the field of medical research in India. We also expect the New Education Policy to focus on creating more doctors and specialists in the country by increasing both MBBS and Post Graduate seats in medicine. Also, the fact that the government’s focus on building toilets and on improving overall sanitation has yielded positive results is encouraging. With nearly 95% of all cities declaring themselves open-defecation free, it is a major boost to the overall health prevention scene in the country. Notably, poor sanitation has been a major cause of the high incidence of communicable diseases such as diarrhea in India, especially among children. We hope the government will continue its focus on improving sanitation”.
Dr Shankar Narang, COO, Paras Healthcare
– Medical Buyer Bureau