Budget 2020 expectations for India’s healthcare sector

Updated: February 01, 2020 8:33 AM

Budget 2020 India: India ranks 184 th out of 191 in terms of GDP% spend on healthcare, as per WHO.

Budget 2020 India expectationsIn order to help specialised services reach out widely to the masses, these healthcare services need to be brought to ‘zero-slab’ under the GST provisions.

By Vivek Tiwari

Union Budget 2020 India: Despite being one of the largest and fastest-growing in the world, expected to reach USD 133.44 billion by 2022 (IBEF report), India’s healthcare industry still needs to be strengthened manifold. As technological advancements in the healthcare space continue to influence trends internationally, with the beginning of the new decade, what the Budget 2020 delivers on the healthcare front can prove to be a catalyst for this at a national level. The allocation of additional funds, new reforms and the introduction of more targeted initiatives have the potential to make way for unprecedented developments in the sector. Let us take a look at the landscape at present and the scope for improvement across key areas.


India ranks 184 th out of 191 in terms of GDP% spend on healthcare, as per WHO. At 85$ (approximately INR 6044), the average healthcare spend per person in India is amongst the lowest when compared to other countries. Even countries like Sri Lanka, China, and Thailand invest three to four times more per capita on healthcare. At present, Government spending on the healthcare industry stands at 1.15% of the Gross Domestic. As the Prime Minister has promised to double its public health spending to 2.5% of the GDP by 2025, the sector expects a higher allocation from the Government’s Budget 2020. The healthcare sector can be made more affordable for the masses only if the Government invests more in the sector. Therefore, we believe that India needs to drastically increase its healthcare budget allocation.

Government of India schemes

There are promising new schemes introduced under the AB-PMJAY (Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana) with approximately 10 crore Indian families who are currently under the scheme. It has a potential of around 50 crore people who can come under its ambit and avail its benefits. The Government should invest in increasing the number of hospitals by establishing more facilities under the Ayushman Bharat wing, which shall directly increase the budget for the sector. There is a need for hospital footprint and illness coverage to be increased as well.


In order to help specialised services reach out widely to the masses, these healthcare services need to be brought to ‘zero-slab’ under the GST provisions. This will help to make critical and quality healthcare equipment and facilities more accessible to the masses. Also, angel taxation has proven to be a significant deterrent for the development of startups and needs to be done away with. The Employee Stock Ownership Plans (ESPOs) should be taxed in liquidity and not on exercise, and the unlisted entities should be taxed in the same manner as the listed ones.

Medical Devices and Equipment

Price control on medical devices and reasonable adjustments to import duty structures on raw materials and medical equipment are some of the positive steps that have been undertaken to make healthcare more affordable and equitable. This trend needs to be supported by a push for medical equipment and devices that are being built under the ‘Make in India’ campaign. The Government must also offer more incentives for the research and development in the medical device sector in order to drive local manufacturing.

In conclusion, we sincerely hope that the Government will review its policies and schemes keeping the interest of the people on top while considering relevant inputs from the various stakeholders in the sector.

(Writer is Vivek Tiwari, Founder, and CEO of MedikaBazaar. Views expressed personal)

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