Team L&M
The health industry is looking at the Union Finance Minister with lots of hope, whether it is increasing budgetry allocation, reducing GST on various products, stress on Made in India or inclusio of pets and other animals’ health is concerned. We spoke to stakeholders across various segments of this industry about their expectations from the Union Budget 2023-24, and this is what they have to say:
Meena Ganesh, Co-Founder & Chairperson, Portea Medical
The budgetary allocation has to be increased to 2.5 per cent of the GDP at least. The government must also offer tax incentives and benefits to platforms that invest in advanced technologies and innovative healthcare delivery. By boosting the supportive healthcare system, the government would not only be able to expand quality medical coverage all over the country, but also reduce
the burden on existing institutional infrastructure.
Runam Mehta, CEO, HealthCube
There is a need for higher allocation in the research and development of new drugs, therapies, and medical devices. As of now, most of the healthcare budget is spent on the maintenance of existing medical facilities and sustaining the government schemes. For diagnostic needs, the country continues to rely on the import of medical devices and in 2022, the import rose by 41 per cent. This not only costs a burden to the exchequer but also hurts the Aatmanirbhar Bharat vision. It is possible to build a robust domestic medical diagnostic device manufacturing ecosystem by building R& D hubs and providing PLI, GST benefits, and simplification of regulatory measures. Increasing custom duty on the import of medical devices, and offering subsidies on the usage of Made in India technology can be a great catalyst for the sector. We are expecting such steps which are guided by a long-term vision in the upcoming Union Budget 2023-24.
Dr Arbinder Singal, Co-founder & CEO, Fitterfly
The growth of any nation is driven by its people. That’s where India has a huge opportunity in the form of over 1.35 billion people who can drive the national economy forward. However, to unlock the full demographic dividend, there is a need to prioritize interventions that facilitate the management and remission of lifestyle disorders such as diabetes, heart disease, and other forms of preventable illnesses. In the post-pandemic scenario, while the budgetary allocation for conventional healthcare needs to be increased, a lot of attention is also needed on alternative healthcare delivery methods. The need of the hour is reforms like a GST offset to promote digital
therapeutics. When the service providers can accrue tax benefits, they are more likely to pass on these benefits to consumers and make the services more affordable. Such tax reforms alongside the promotion of technology like digital therapeutics for disease management
and prevention can significantly reduce the burden on conventional healthcare.
Vivek Srivastava, Co-founder & CEO, HCAH
Government should encourage Out-of-Hospital Care services for both preventive, curative and rehabilitative care (including preventive care), covering it under the government schemes like Ayushman Bharat, to cut the heavy expenses on medical bills at the hospitals during the recovery process. Revaluation of the GST applicable to healthcare services, for instance, reducing the expenses on hospitalization. For healthcare services, the government should consider making the GST “zero-rated” as it would lessen the financial strain on patients and their families. There are ambiguities in some of the services in the out-of-hospital space. The government should provide them with the same status for such services as they are delivered within the hospital, thus reducing the cost of recovery for the patients.”
Dr Himani Narula, Director & Co-founder, Continua Kids
The government needs to allocate funds for creating an inclusive system of education and healthcare for individuals with a disability, and for children with neurodevelopmental disorders. Funds need to be allocated for early identification, screening, and early intervention. So that the neuro-disability can be nipped in the early years and impairments and disabilities later in the life of individuals can be reduced. This effort will tremendously help to boost the GDP of our country because the percentage of disabled individuals and dependent individuals will be less.
Aayush Sharma, Senior Principal Associate, S&A Law Offices
The government should consider initiatives to curb medical inflation. It should announce a free drug scheme so that burden of buying medicine is relieved from the people. Additionally, the GST for the healthcare industry needs to be rationalized so that the businesses in the sector may attract more investment and provide services to customers at affordable rates. Furthermore, healthcare services in Tier II and Tier III cities need to be strengthened, especially when it comes to hospital facilities, which might be explored using a PPP model.
Namit Chugh, Investment Lead, W Health Ventures
We expect this budget to increase the allocation for mental health and further build resilience of national mental health infrastructure, as well as incentivize strengthening of the talent pool of counselors and mental health professionals to handle the massive mental health challenge we are facing. We need additional investment on skilling other healthcare personnel such as nurses and lab technicians as well.
On the digital front, now that a robust platform and infrastructure for managing digital registries of healthcare providers and patients is created, there is a dire need to boost adoption and accessibility. The government should allocate more funds for rolling out this initiative. The creation of longitudinal data for masses will unlock several use cases such as data interoperability, personalized healthcare recommendations, hyperlocal pharmacy data, etc., and will further accelerate India’s digital health agenda.
Vineet Gupta, Director-Government Affairs, Varian Medical Systems
Adequate investments in R&D can help advance the industry and make India a ‘global centre for X-ray emitting.’ The returns with higher investments in R&D will boost innovation. There is a need to retain the existing duty structure for the X-Ray emitting units like Linear Accelerators, Cath Labs, Mammography machines. An increase in import duties will directly affect hospitals and patients who are already facing financial strain due to the pandemic. As a result, patients will have to pay more for availing healthcare services. Moreover, this will also hamper clinical service providers from expanding their services outside of metro cities.”
Dheeraj Jain, Founder & MD, Redcliffe Labs
The GST for the healthcare industry needs to be rationalised so that the businesses in the sector may attract more investment and provide services to customers at affordable rates. The healthcare services in Tier 2 and Tier 3 cities need to be strengthened, especially when it comes to hospital facilities, which might be explored using a PPP model. The budget should also include a strategy for increasing the availability of healthcare professionals, particularly in Tier 2/3 & 4 towns.
The forthcoming budget should also focus on healthcare digitization because it is a fundamental precondition for providing value-based care throughout India’s healthcare continuum.
Furthermore, the Ayushman Bharat Digital Mission should be implemented in all hospitals, especially those located in rural areas. The implementation of consolidated medical records and digital health ID cards must be emphasised for seamless access to patient data in one location.
Anish Bafna, CEO & MD, Healthium Medtech
The medical device industry is highly capital intensive, hence requires the constant intercession of the government to encourage manufacturing and production, both in scale and quality. As we gear up for the Union Budget 2023-24 with the spirit of self-reliance, the industry demands favourable policymaking in line with the current inflationary challenges. Reduction of custom duties on raw material, removal of the additional five per cent health cess and increasing export incentives under Remission of Duties and Taxes on Export Products Scheme (RoDTEP) is critical for trade margin rationalization. Relooking at the tax and tariff structures on medical device imports would go a long way to provide some leeway for the industry to flourish and consequently boost the domestic R&D ecosystem.
For the medtech sector to grow holistically, the compliance burden needs to be brought down collectively to make the environment conducive for business. The ease of application and registration procedures, supervisory regimes, credit structures, transparency in pricing, taxes and cross border trade will encourage local manufacturing, R&D and address the concerns in our supply chains. Strategic investments and partnerships with commissioned Medtech Parks and their readiness for national and international companies should be able to push the needle in the positive direction. The Union Budget of 2023-24 needs to outline industry supportive policies, simplified protocols, and simple GST norms to aid the overall development of the medtech sector.
Alok Katiyar, Co-Founder, WeClinic Homeopathy
The Union Budget 2023 should prioritize on introducing more innovative schemes and policies that would aid the long-term growth of telemedicine, AYUSH-based healthcare and tech-enabled health systems. As of date, a very small portion of the overall budget allotted for healthcare sector has been designated for the AYUSH space in the previous years’ budgets; but in the upcoming Budget, we expect it to increase substantially. Furthermore, the Government should also focus on the opening of new hospitals and primary health centers for AYUSH treatments.”
Pritika Singh, CEO, Prayag Hospitals Group
The government should focus on the equal distribution of sufficient manpower in hospitals across the country. We have seen that new hospitals have come up in many places, including in rural and remote areas, but there is not enough manpower there. So manpower is a big concern and these healthcare professionals should be well-trained so that they can use the latest technology and be a part of the digitalization process. In that direction, private hospitals should be allowed to provide paramedical courses so that this manpower shortage can be met. The price list that was fixed under the Ayushman Bharat scheme is not satisfactory and it ends up in losses for private hospitals. So, we expect a further revision of the rate list under PMJAY. Another crucial aspect is the setting up of
more dedicated mental health hospitals across the country. Mental health is still a taboo in our country and people should
know the difference between mental hospitals and mental health institutions.”
Deepak Sahni, Founder & CEO, Healthians
The government should push for enhancement of health insurance premium exemption, and an increase in tax exemption on preventive health check-ups. At the same time, while healthcare services are exempt from GST, the high GST rates on diagnostic equipment, re-agents, lab supplies and devices, ultimately is a hindrance in bringing down the cost to the consumer. I look forward to some relief from this burden on the consumer by a reduction in the GST rates.
Dr Vishesh Kasliwal, Founder & CEO, Medyseva
The budget allocation to the healthcare sector should be increased by minimum 20 per cent from the last year i.e. it should be at least Rs One crore that can be sub-allocated to various departments like, ABDM, Infrastructure, education, Human Resource, Research and other programs. To achieve the figure of 2.5 per cent of GDP as committed in National Health Policy, 2017, the stagnant figure of 1.3 per cent must rise to at least 1.5 per cent this year. Being a telemedicine company, we strongly recommend improvements in infrastructure in terms of internet facilities, properly equipped tertiary hospitals in case of patients who require more than just consultation.
Dr Shrey Kumar Srivastav, Assistant Professor, Sharda hospital
B-grade or smaller cities need better coordinated and integrated healthcare systems to provide better health-related policies. Healthcare professionals must be given better facilities. Technology should be used to educate people about different government healthcare services and schemes. Making government hospitals more resourceful will also help in strengthening small cities. New health-related start-ups should be supported and promoted by governments and investors which will definitely increase the health sector investment.
The 18 per cent GST is on the higher side so it should be cut down to a minimum percentage for making the healthcare system more affordable. To increase medical tourism India should focus on properly coordinated infrastructure which should match the expectations of foreign patients. Making health insurance policies more affordable and easily implementable and educating people about it, even from school or childhood time will definitely give increase the numbers.
Tarun Gupta, Chief Product Advisor, Nutrabooti
The nutraceutical industry has been observing growth at a high pace since the pandemic. Pharmaceutical products are subject to taxation ranging from 5-12 per cent, while nutraceutical products are taxed at a rate of 18 per cent. In order to promote the health of the nation, it is important to support the use of nutraceutical products. Based on the surge of demand for these products, the nutraceutical industry is expecting a relaxation in the taxation rate in the Union Budget 2023-24 in order to provide supplements at less rates to the consumers.”
Pranath Sisodiya, Co-founder, Nutrilitius
The nutraceutical industry of India is expecting a growth of approximately 3.5% market share of the global market by the end of 2023. With these high rates of growth, due to excess market demand of nutraceutical products, Performance Linked Incentive Scheme (PLI) is a common way of incentivizing and boosting the manufacturing capacity. The nutraceuticals industry in India is growing at a double-digit rate and the PLI scheme can be the catalyst to accelerate this growth. There is a need to focus on building an Agri supply chain, robust research and development of infrastructure and encourage innovation at various levels. This is where the PLI scheme and a robust PPP model can contribute monetarily and non-monetarily at all levels of research, technology, and manufacturing. The industry is expecting policies centered on the development of nutraceuticals and relaxation in taxes as well. With little intervention, the government can encourage growth and empower the nutraceutical industry.”
Dr S Senthil Kandeepan, MD and CEO, CHC Healthwatch
The health tech industry has seen rapid growth over the last five years and has been constantly focusing on developing and implementing newer technologies and approaches to help improve healthcare delivery and outcomes across even the remotest of regions. The industry has huge growth capability to develop into a highly effective and efficient healthcare asset. The indigenous manufacturing needs to be incentivized to compensate for the shortfall of products Some potential areas of focus for health tech companies to further expand their ambit can include digital health tools and services, medical devices, telemedicine, and health data analytics. The government needs to focus on allocating more of its healthcare expenditure to the health-tech sector. We would also love to see the government incentivizing health-tech manufacturers and researchers, and waiving GST off health-tech products to make them more accessible to the end user, along with allotting higher amounts of funding for R&D as well as ensuring that funds earmarked for the development of healthcare technology are fully utilized.
Anushka Iyer, Founder and CEO, Wiggles
We expect an increase in funds for healthcare sector, especially for animals and some species that are on the brink of extinction. The health is important for both humans and animals. The first and foremost area that needs to be focused on is an increase in financial support for veterinary services. A substantial budget will foster an environment that pushes more people towards creating quality services that can serve both pets and community animals.
Secondly, there has to be a concerted effort towards education and sensitization for all. Everyone should be educated on the simplest way to approach or help a pet and community animal. The government should lend support in creating animal-friendly neighbourhoods ensuring animals are safe and healthy like human beings. Think of this as a green city equivalent for animals, which requires funding and intent.
Sandeep Gulati, General Manager – South Asia, ResMed
There are numerous aspects of healthcare that ought to be explored and engaged in and one among them is addressing sleep disorders, which is more of a silent disease in India. The sector would progress with the development of preventive healthcare by employing the necessary R&D investments, leading to the best possible health outcomes.
We are in sync with the Ayushman Bharat Digital Mission (ABDM) which aims to establish the infrastructure required to sustain the nation’s innovative integrated healthcare system. We are hopeful that the 2023 budget will focus on the expansion of ABDM, emphasizing on Home based Chronic Disease Management for patients using telemonitoring”.
Kiriti Acharjee, co-founder, HealthFab
The Union Budget should emphasis on Women wellness – especially menstrual hygiene. We already have tax exemption on sanitary pads, however, this could be extended to manufacturing and production. The expenditure incurred in their production is still taxable. Decreasing import duty for raw materials could help such start-ups to stretch themselves in the market, meeting the public demand.
Further, decreasing import duties for raw materials could bridge the gap between supply and demand as well encourage more Indian manufacturers to start manufacturing biodegradable napkins. There should be policy level incentivisation for Made in India products, start-ups helmed by women and ventures that focus on sustainability and solving for women’s issues.
Ameera Shah, MD, Metropolis Healthcare Limited
The government should consider zero-rating GST on healthcare services. It will ensure eligibility for input tax credits, which may help to reduce the cost of said services, and a refund of unutilized input tax credits should also be allowed to provide additional working capital to industry players. The input credit for GST paid can enable the healthcare providers to pass it on to the patients in the form of lower pricing and the services can be made accessible to patients in smaller towns. Along with this, it is important to address the shortage of healthcare professionals (doctors, nurses, and technical staff) willing to work in Tier 2/3 cities and look at non-traditional ways to double the number of doctors. In addition, the government should prioritize lower-cost financing through tax breaks for both existing and new healthcare projects. Also, they should provide a 15-year tax holiday for new projects and a 10-year tax break for existing projects as reinvestment support. Declaring healthcare, a national priority sector and classifying it along the same lines as agriculture (priority-sector lending) will allow banks to lend to private healthcare institutions for longer periods of time and at lower interest rates.
