Union Budget 2020






The Union Budget of India for 2020–2021 will be presented by Finance Minister, Nirmala Sitharaman on 1 February 2020, 11 am as her second budget.

This will be the second budget of Narendra Modi led NDA government’s second term.

Post-budget Reactions

“2 years back Finance Minister announces Duty increased to 10% up from 7.5% and in evening we saw notification reversing this to 7.5% . This year FM announces taxation will drive public healthcare funding but the fine print states it as cess so if duty on a device was 5% it becomes 5.25 % effectively ! Only a meagre increase of 0.25% to protect domestic manufacturing and motivate traders to become manufacturers. AIMED after going through the fine prints of the budget finds out that only a meagre increase of 0.25% is given whereas the Medical Devices Industry thought  5 % cess on Basic so it’s 5+ 5 = 10%. Today when India faces the coronavirus epidemic what’s India’s preparedness and health security of our country? 60% of gloves we consume, we import even if we are the 4th largest latex – rubber producing nation in world. Our own manufacturers import non sterile latex examination gloves and market these under their brands – not a single manufacturer bothers to produce these low priced examination gloves if the duty on these is zero %. Tomorrow if China can’t supply due to factories being shut and Malaysia has to give priority to China, India does not have the capability to take care of health security of its citizens due to such apathy to protect its manufacturing. Similar is the case of many other medical devices whether thermometer or hot water bottle or adhesive bandages. We were expecting the government to move forward on promised reforms and anticipated conducive measures to boost domestic manufacturing of the medical devices. It is frustrating that against our expectations, the government has not included any measures to help end the 80-90% import dependence forced upon us and an ever increasing import bill of over Rs. 38,837 Crore & promoting growth Indian Medical Device industry”.
Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD)

“A 5% cess on custom duties for import has been imposed on medical devices in the budget today which will increase the cost of the imported medical devices. Ultimately patients will bear this cost and affordability will  decrease. This is against the basic ethos of PMJAY wherein government wants to provide affordable healthcare for all. This is a retrograde measure and goes against the global companies which provide more than 80% of the critical care medical devices as well as the patient who gets exposed to the danger of smuggling of these low bulk and high value devices, without service & legal guarantees from neighbouring countries where the tariffs are already lower. The domestic self-sufficiency argument of the government also needs to be taken with a grain of salt. We do hope the government has not looked at the classes of products on which it plans to impose this cess, monolithically. As many sub categories of these classes would not be manufactured in India at all”
Sanjay Bhutani, Director, Medical Technology Association of India (MTaI)

“Budget 2020 has certainly focused more on the healthcare than previous budget. Government in last two fiscal years have increased budget for healthcare sector from 54000 Cr to 69000 Cr mainly aiming to provide more support to schemes like Ayushman Bharat, PM Jan Arogya Yojana Mission, Indradhanush and more. Government will be concentrating on empanelling hospitals under Ayushman Bharat more in Tier 2 cities for the benefit of the poor in these areas. Also in rural areas, where there are no hospitals, government aims to operate on PPP mode hospitals. As a measure to boost local manufacturing of medical equipment government has proposed health cess on import which is going to help in boosting local industries and encourage competition. “TB Harega, Desh Jeetega” campaign will be strengthened to end TB by 2025 to raise awareness amongst people in the country. Last but not the least, this Budget 2020 didn’t leave individual taxpayers concern unattended. Much awaited announcement was made to simplify direct tax regime and lowering the taxation in various slabs which will certainly add to the appraisal of the government in next poll. Removing rebates needs a detailed assessment and that is why tax regime is kept optional.”
Shalabh Paliwal, Chief Financial Officer, Jaslok Hospital and Research Centre

“The government has shown its commitment towards healthy India by providing INR 69,000 crore to the healthcare sector. It has rightfully focused on bringing in several key structural reforms for the nation moving towards that goal. It is heartening to see the Government’s display of commitment and concern towards rural healthcare by announcing more empanelled hospitals under the flagship Ayushman Bharat Scheme in Tier 2 and 3 cities. The budget has rightly outlined by specifically focusing to those areas where there are no hospitals. The proposal to set up Viability Gap funding window to build hospitals in the public-private-partnership (PPP) model will widen the scope of the government’s flagship scheme, AB-PM-JAY and will provide large scale employment opportunities to youth. It is encouraging to see the government’s support towards manufacturing high end medical devices under the Make in India program. This will increase affordability and ease of access in procuring the equipment. On the other hand, the announcement of cess on import of medical equipment will be used for creating infrastructure for health services in the aspirational districts is accepted as a welcome move. The allocation of ₹3000 crore for skill development which also includes hospital staff, care givers and paramedical staff increasing competency in the healthcare sector, is encouraging. The expansion of the Jan Aushadhi scheme is a move to make affordable healthcare at the door step of the common man. Budget 2020 brings in very positive growth for the healthcare delivery in the country. This is not a populist budget, but a budget that has far reaching positive impact on healthcare sector”.
Alok Roy, Chairman, Medica group of Hospitals

“The Budget has focused on implementing major steps to revitalize the healthcare industry and allocation of Rs 69,000 crore will definitely contribute in making India a better place to opt for good quality healthcare facilities. Additionally, the opening of hospitals in tier-2 and tier-3 cities, and diversion of proceeds from taxes on medical devices for health infrastructure development in these cities, along with targeted campaigns to eradicate evils like TB are a few other laudable steps. We look forward to collectively building a healthy, robust India.”
Dr Ashutosh Niranjan, Medical Superintendent, Sharda Hospital

The Union Budget has focused in improving healthcare needs of the masses, this is expected to improve health and wellbeing of the population. The allocation of Rs 69,000 crore to healthcare will enable further reforms in the sector, and create employment opportunities. The larger focus on Ayushman Bharat and Mission Indradhanush will increase access to quality health care services, particular in Tier II – III cities. The government’s move to expand Jan Aushadhi Kendras will make medicines more affordable, while the initiatives to eliminate tuberculosis and foot and mouth disease, will certainly improve health and longevity in the country going ahead.
Prasun Sikdar, MD & CEO, ManipalCigna Health Insurance

“The expansion of Ayushman Bharat scheme to help set up hospitals in Tier II and Tier III towns is a welcome move that will help in reducing the burden of hospitals in Tier I cities. More number of people will gain access to medical treatment these towns hereby reducing the commuting time and expenses for treatment in Tier I cities. The increased amount of allocation of funds to Rs.69,000 crore is seen as a bold step taken by the government to help empower those who requires it the most. The announcement to attached medical colleges with District hospitals will help to bridge the shortfall of medical professionals in district levels. This will help boost the healthcare industry”.
Dr. Rohinton Dastur- Director Medical, Bhatia Hospital Mumbai

“In the Union Budget 2020, we welcome the increase in allocation of 69,000 crore for the health sector with 6,000crore in PMJAY Ayushman Bharat scheme, with special emphasis on viability gap funding for setting up hospitals in the 112 aspirational districts (PAN India). Welcome the announcement on converting existing district hospitals to medical colleges through PPP mode, there is indeed a huge shortage of doctors in poor state districts.”
Farhan Pettiwala, Executive Director & Head Development– India & South Asia, Akhand Jyoti Eye Hospital (A Tata Initiative)

“Budget 2020 was as crucial as difficult specially for certain sector like healthcare. India’s healthcare industry needs to be strengthened manifold. As  technological progress in the healthcare sector continue to influence trends globally, with the beginning of the new decade, Budget 2020 delivers on the healthcare front  seems to be a catalyst for this at a national level. The allocation of additional funds, new reforms and the proposals of more specific initiatives have the potential to make way for unprecedented developments in the sector. I see lots of turn around potential in proposed budget 2020 though fair implementation still remains as concern”.
Raktim Chattopadhyay, Founder & CEO, Esperer Bioresearch

“It is encouraging to see over 10% increase in the allocation of funds to the Healthcare sector for the budget 2020-21. While there has been no significant announcement pertaining to diagnostics industry, it is good to see the government’s growing focus on PPP mode ensuring accessibility and availability of quality healthcare services in remote locations. We are intrigued about how the government will use the fund of Rs 6400 crores allocated exclusively to Ayushman Bharat to the benefit of the people residing in Tier II and III cities. The expansion of government’s existing programme – Mission Indradhanush – to cover 12 new diseases and 5 new vaccines would be extremely beneficial in order to drive immunization across the country. The investment of Rs 8,000 crore for National Mission of Quantum Technology and Application is another noteworthy announcement for the healthcare industry.  We, at CORE Diagnostics, agree with the government that Analytics, IoT and AI are integral part for the growth of the industry and look forward to the implementation of this fund for R&D in the healthcare sector which will further result in innovations and advancements. As the Finance Minister rightly said, data is indeed the new oil. It is promising to see the improved attention from government on this subject in form of their support to the private sector in building data centre parks throughout the country. I’ve also spoken about the importance of genetic mapping and the announcement of the two national level schemes will ensure protection and bring more structure to the abundant national level database that we as a country already possess”.
Zoya Brar, Founder and CEO, CORE Diagnostics

“The industry had high expectations of this budget as it was seen to be an opportunity to announce big, bold reforms given the state of the economy. On that count, there is a degree of disappointment in some quarters as expectations have not been met. However, I am happy to see that healthcare continues to be an integral part of the Government’s key priorities. The announcement on the expansion of the Ayushman Bharat program by setting up additional hospitals in tier 2 and 3 cities is a welcome move. Other measures in improving the healthcare infrastructure and capacity building in the sector are also commendable. I would however have liked to see a significant financial incentive to boost exports and improve the competitiveness of the Pharma sector. I hope this will take shape with a new export incentive scheme. The overall thrust on ease of doing business, regulatory simplicity and policy stability should help the pharma industry scale new heights.”
Satish Reddy, Chairman, Dr. Reddy’s Laboratories Ltd and President, Indian Pharmaceutical

“I would like to congratulate the Finance Minister on presenting a holistic budget specially from the perspective of enhancing access to healthcare in the country. The increased allocation to healthcare and specific focus on addressing the healthcare infrastructure gap specifically in tier 2 and tier 3 cities through PPP mode hospitals being planned to be set up under viability gap funding will significantly help us achieve our goal of Ayushman Bharat. Elimination of Dividend Distribution Tax along with incentives directed towards medical devices companies under electronics manufacturing will a big push towards ‘Make in India’ efforts for medical technology.”
Nalinikanth Gollagunta, Managing Director, Wipro GE Healthcare

”Budget 2020 is visionary and in accordance with the policy of improving and expanding healthcare services reach to all. Make in India initiative for Medical devices industry has been given a big boost. Imposing health cess on the import of medical devices will help domestic manufacturing companies. Further, using tax proceeds to fund the creation of healthcare infrastructure will help in address issues of capital requirements for building healthcare infra in Tier- I & II cities. The government is focused on creating the healthcare infrastructure and invest extensively in improving healthcare services in tier I-II cities in the country. Announcement of extending the ambit of Ayushman Bharat through the establishment of PPP model hospitals in 112 new districts of India will improve healthcare infrastructure. Increasing the budgetary allocation for the healthcare sector to 69,000 crores will enhance primary health coverage and strengthen health and wellness centers (announced under Ayushman Bharat) which will help to reduce the disease burden.”
GSK Velu, Chairman & MD – Trivitron Healthcare

We congratulate the government on presenting the Union Budget 2020 for the common man and it’s encouraging to see that the government has taken the lead to deliver on its promise of excellence in healthcare. The government’s “TB Harega, Desh Jeetega” initiative to eradicate tuberculosis by 2025 is a significant step towards building a healthy Society. India being the highest recorder of TB cases in the world makes it imperative for us to understand the high risk of catching the disease. The government’s vision aligns with our mission to raise consciousness and promote advanced diagnosis and treatment of tuberculosis among patients. Additionally, the government’s impetus on boosting the domestic manufacturing of electronics and medical devices in the country will reinforce the commitment towards raising awareness for early detection in India. Apart from this, the announcement to boost Artificial Intelligence is a great step to strengthen the usage of technology in the field of healthcare while intensifying the quality with accessibility and affordability. We believe that the government has put forward a progressive budget with a strong vision to take India’s social, economic and overall well-being to greater heights.”
Chander Shekhar Sibal, Senior Vice President, Fujifilm India

“The allocation of INR 69,000 Crore for healthcare and opening of hospitals in tier 2 and tier 3 cities are certainly positive steps in ensuring better healthcare. It is encouraging to see the government’s thrust on launching campaigns to eliminate animal diseases such as Foot and Mouth Disease (FMD) and Brucellosis by 2025. This ambitious goal will help in improving animal health in the country and increase livestock productivity. The proposal to expand the coverage of artificial insemination to 70 percent from 30 percent will also assist in increasing livestock productivity and benefit farmers. The seamless national cold supply chain for perishables, setting up of Kisan Rail through PPP model for the transportation of the perishable goods (like milk) will help the dairy farmers to supply their produce more quickly and help to increase their income. The proposed steps will be an opportunity to improve animal health in our country and will help in increasing farmers’ income”.
Dr. Prasanna Deshpande, Deputy Managing Director, Indian Immunologicals Limited

“Setting up investment clearance cells to help reduce hurdles in setting up business is a great way in boosting entrepreneurial efforts in the country. The budget’s focus on health care through expanding Ayushman Bharat, setting up more hospitals in Tier 2 & 3 cities, establishing more Jan Aushdhi outlets are some very welcome moves.
The boost to startups through a variety of moves like easier access to debt, dedicated early stage seed fund, and other tax rebates are sure to allow more and more startups to flourish. A skilled team is the backbone for a startup, at Healthians too our employees are our most important resource, deferring taxes on ESOP’s which are currently dual taxed is great way to help company retain talent and reduce attrition. Creating a tax charter and enshrining it in the Act is a welcome move, however the real benefit will need to assessed based on implementation. Removing DDT and letting corporate tax remain unchanged are sure to boost confidence for companies”.
Deepak Sahni, CEO & Founder, Healthians

A holistic effort by the government to facilitate ease of living and ease of doing business, the 2020 budget comes as a hope for the stagnant economy. With an allocation of INR 69,000 Cr. for the healthcare sector and INR 35,600 Cr. for nutrition-related programs, health and wellness have received due attention in the budget. Apart from the healthcare, promoting entrepreneurship and facilitating easy tax structures for business, strengthening the infrastructure and cold chain logistics as well as focus on skill development, are all areas that will hugely benefit the nutraceutical sector in India. As entrepreneurs in the nutraceuticals space – a promising sector with huge growth potential, I see tax policies like reduction in corporate tax for companies to 22%, removal of DDT and simplified return for GST is being introduced from April 2020, as impactful initiatives that will help drive business.”
Sushant Raorane, Co-Founder, Director Adroit Biomed

Read Full Speech HereMedical Buyer Bureau

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