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Union Budget analysis

The Finance Minister in the Union Budget, presented in the Lok Sabha on February 1, 2021 announced an allocation of ₹71,269 crore for the healthcare sector in the 2021-22, a 3.28 percent increase over last year. In 2021-21 the outlay was ₹69,000 crore; and in 2019-20, ₹62,659.12 crore. Since the pandemic, last year’s budget expenditure had been increased to ₹78,866 crore. So, technically the allocation proposed for the upcoming fiscal year is lower than 2020-21. We invited opinion makers and business thinkers from the medical industry for their comments. Some responses:.

Dr Girdhar J Gyani
Director General,

The pandemic has changed many equations in the IVD industry. It was an eye opener to manufacturers around the world. There is an exponential growth in molecular diagnostics-based testing. similarly, parameters like Immunoglobulins, PCT, D-Dimer, CRP, and Ferritin used as a prognosis tool for COVID contributed the growth in the immunochemistry segment.

“Let us face it;₹35,000 crore have been provided for the vaccination alone, which is dire necessity of the nation. Balance allocation of ₹60,000 is crore is for water and sanitation and ₹2700 crore is for nutrition, which is marginally lower than last year. While allocation for preventive healthcare (by way of drinking water, sanitation, and nutrition) is appreciated, we were expecting at least 20 percent rise on healthcare to cater to more coverage for PMJAY and also the CGHS.

The pandemic has revealed the huge shortage of critical care beds in public sector, which needs bigger consideration. There is no visible budget component for government’s ambitious program: National Digital Health Mission, which comes as a disappointment. Budget is silent on any incentives for private sector for setting up of hospitals in tier-II/III cities. All in all, budget has not squarely addressed the availability and accessibility issues in our healthcare delivery system.”

Rupak Barua
Group CEO,

“As we navigated through a period of unprecedented difficulties during the pandemic months, the gaps in overall healthcare infrastructure were exposed. We all realized the need for increased investments in healthcare and this year’s Budget has addressed the issue. On behalf of the CII, we had presented our case to the government and urged that the budgetary allocation for healthcare be increased from the previous 1 percent of total GDP to 2.5 percent, over the next 3 years. Budget 2021 has assured a significant rise in allocations for healthcare and we are expecting the sector to grow stronger over the next few years. Even the Budget outlay shows a 137 percent increase in investment plans, besides significant provisions for development of primary healthcare infrastructure, R&D in disease identification, and for COVID-19 vaccination. Overall, these are positive steps forward and I believe these moves are likely to help boost the overall economy.”

width=Shobana Kamineni
Executive Vice-Chairperson,
Apollo Hospitals
“Last year we struggled just to survive, and with this year’s budget, we expected the business to get on a path of revival. We got a pleasant bonus since the Budget also outlined an investment platform to a future, where India will thrive! The Budget could be a turning point for India and how future Budgets would be positioned. 2021 Budget will be remembered.”

width=Dilip Jose
MD and CEO,
Manipal Hospitals
“The finance minister has accorded special attention to the healthcare sector, increasing the overall outlay to health and well-being to nearly ₹2.25 lakh crore, an increase of over 135 percent over last year. The allocation of ₹35,000 crore toward COVID vaccination also is a very welcome step. Significant focus also has been brought to scaling up infrastructure, like critical care capabilities as well as primary and secondary care facilities through the PM Atmanirbhar Swasth Bharat Yojana. It is also very heartening that the FM promised higher allocations as required, as institutions absorb the funds committed at the first instance. All in all, a great beginning has been made in the journey to take our healthcare system to the world class standards. Further, the augmented government spends planned for capital expenditure by over 35 percent would aid job creation and growth in incomes, which would in turn enable people to spend on healthcare when required.”

width=Dr BS Ajaikumar
Executive Chairman,

“India is in dire need of Universal Healthcare Coverage (UHC), which was not well articulated in the finance minister’s budget. It is good to see that we are spending ₹35,000 crore on the COVID-19 vaccine. The proposed budget of ₹64,180 crore invested over 6 years to healthcare is not substantial in my purview. The overall spending should have been much more because we started from a very low base post COVID-19. The government spending only one and a half percent of the GDP so far on healthcare is insufficient. While it is good to focus on preventive healthcare and wellness clinics, the government’s intention on cooperating with the private sector is still unclear. A cess similar to education cess could have been created in healthcare to bring uniformity through UHC. Overall, I am glad to see some spends directed toward healthcare, but it is not substantial, especially considering that we are battling the effects of COVID-19”.

width=Gautam Khanna
Hinduja Hospital

“The Union Budget-2021 delivered on expectations after what the world saw in the year 2020. This government did have a focus on improvising healthcare through various initiatives launched in previous years but this year the Budget focused on the preventive-curative aspect of healthcare, on building infrastructure and increasing research in health areas which will help tackle future healthcare needs of the population. With an allocation of ₹64,000 crore, the Atmanirbhar Swasth Bharat Yojana will help setting up labs in tier-I, tier-II, and tertiary care facilities across the country. By budgeting ₹35,000 crore for vaccine developments and rollout, the government has its intentions in the right direction. While overall the Budget was satisfactory, the industry was expecting some exemption from the government on the lines of CapEx spent by hospitals to bring in the infrastructural changes to tackle the COVID-19 pandemic and also moving to a zero GST regime, which did not happen. We also hope the government takes the help of the private sector in the form of PPP to set up the healthcare infrastructure planned.”

width=Bomi Bhote
Ruby Hall Clinic

“While healthcare is one of the most important pillars of nation-building, traditionally India has not invested sufficient resources on health of its citizens. The current spending of India remains 1.6 percent of the GDP while the government’s own National Health Policy 2017 envisages increasing the health budget to 2.5 percent. Even during time of COVID-19, health services get only negligible percent of the total central budget—lower than the 2020-21 budget. Computing for inflation, the increase in allocation for health services alone disappears. The past year has been testament to the fact that healthcare problems can greatly strain the country and its economic stability. This is where private healthcare comes into play. I expected the government to provide appropriate fiscal incentives and create sustainable public policy to encourage investment in private healthcare infrastructure, given that the private sector caters to 70 percent of healthcare demands.”

width=Neelesh Shinde
Jupiter Hospital

“COVID-19 pandemic has taught the world that the healthcare system has to be on top priority. Our finance minister announced that 2021-22 Budget rests on six pillars and health and well-being is the one of the important pillar of budget. Budget focus is on strengthening privative, curative and well-being by creating huge health infrastructure. New centrally sponsored scheme PM Atmanirbhar Swasth Bharat Yojana will be launched with an outlay of about ₹64,180 crore over 6 years to develop primary, secondary, and tertiary care health system across country, strengthening of national and regional health institutions to detect and cure new emerging diseases, and integration of health labs in all districts. Proper implementation of proposed initiatives along with adequate support to home healthcare, telemedicine, and virtual critical care infrastructure under National Digital Health Mission as well as knowledge upgrade of healthcare professionals through training will definitely bridge the gap between our urban and rural area’s healthcare deliverables. Health and wellbeing is one of the most important pillars of the 2021-22 budget. If intentions are clear, then result will follow under the strong leadership.”


Daniel Mazon
Vice Chairman and Managing Director,
Philips Indian Subcontinent

“We congratulate the government on a pragmatic and focused Budget-2021. The launch of the Atmanirbhar Swasth Bharat Yojana is timely and will have a positive impact on increasing access to affordable healthcare while building on India’s domestic capabilities and assets in healthcare. We look forward to the government’s support in developing local manufacturing further, which is currently at an early stage. This will help meet the country’s long term goals for improving healthcare, while also mitigating current challenges brought about by COVID-19. Philips remains committed to supporting the government in its vision for transforming healthcare facilities in India”.

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