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Union Budget 2022-23: Pre-budget recommendations – Dr GSK Velu

Due to the Covid-19 pandemic, the state of healthcare in India has once again come under the spotlight. The industry as well as the government have been proactive in not only mitigating the crisis, but at the same time, taking initiatives to build a robust healthcare system across the country. Government of India has shown support for the industry by making and implementing new-age policies while at the same time, making an extra effort to save the country from the pandemic.

Government of India initiatives for healthcare ecosystem

  • Due to the new-age policies by Government, the healthcare industry has grown to be one of the most essential industries in the country. In 2022, the market is estimated to have tripled to Rs. 8.6 trillion (US$ 133.44 billion). The industry is expanding rapidly as a result of improved coverage, services, and increased spending by both public and private entities.
  • Government’s recent initiatives for the healthcare industry has clearly proven the importance that the industry deserves. A number of policies and packages were created, including production-linked programme for APIs/KSMs and medical devices, robust plan for pharmaceuticals as well as advancement of Bulk Drug Parks and Medical Device Parks. These launches were in line with the ‘Atma Nirbhar Bharat’ which attracted domestic and foreign investors to participate in this industry.
  • The government of India also allocated funds to promote the existing ‘National Health Mission’ which is aimed at developing primary, secondary and tertiary healthcare system in the country. Apart from this, another path breaking initiative by the government which will mostly boost the domestic healthcare industry is the credit incentive program worth Rs. 50,000 crore (US$ 6.8 billion). Under this program, companies can leverage the fund to expand hospital capacity or medical supplies. The program emphasizes on strengthening healthcare infrastructure specifically in the rural areas during COVID-19 crisis. It is also one of the safest credit program since the guarantor in this case is the government itself.
  • By undertaking deep structural and sustained reforms to strengthen the sector, the government has not left any stone unturned when it comes to fighting this outbreak. Covid-19 prevented people from physically accessing hospitals, and the situation was even worse in far reaching regions of the country. In such a scenario, the Health Ministry came up with “eSanjeevni Telemedicine Service” which was developed with the aim of providing medical consultations from the safety of the home. So far, the service has successfully executed more than 12 million tele-consultations.
  • One of the best efforts by the government has been the development and implementation of the CoWIN platform. In a country of ~140 crore citizens, simply having enough stock of vaccines is not the only important thing. Its timely distribution, and access have high importance. The platform has been successful in smooth delivery and inoculation of vaccine. Quite recently, India had administered 150 crore doses in total, all thanks to the efficient CoWIN platform. This success was acknowledged by several countries across the globe and many have also shown keen interest in developing a similar platform for themselves.

Pre-budget expectation 2022-23

  • 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 and 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 percent 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 percent 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.

The author is CMD, Trivitron Group of Companies and Neuberg Diagnostics
MB Bureau

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