Budget 2020: Healthcare industry needs this to achieve vision of ‘Healthy India’

Updated: January 27, 2020 3:14:57 PM

Budget 2020-21: It is hoped that this year's healthcare budget will see the allocation go up to 2.5% of GDP and in turn this increased allocation be channelled to primary healthcare where it is needed most.

Budget 2020, Union Budget 2020, Budget 2020 India, Union Budget 2020 India, Budget 2020 corporate tax rate, Budget 2020 tax rate for Startups, Budget 2020 expectations, Union Budget 2020 India: Allocation of public healthcare spending has been abysmally low in India since Independence.
  • Vikram A Munshi

Union Budget 2020 India: As another Budget approaches the healthcare industry awaits hopefully. There are two aspects of healthcare — the healthcare infrastructure and the healthcare industry. Every industry needs the infra structural support to grow. For example, the automobile industry needs the infrastructure of motorable roads, fuelling stations, robust financing system etc. Giving incentives to an industry without sufficient investment in infrastructure has a sub-optimal impact.

Watch Video: What is Union Budget of India?

Let’s have a look at the current public healthcare infrastructure in India. The Indian healthcare system is a 3-tiered structure under National Rural Health Mission comprising the sub-centres and Primary Health Centers (PHCs), the government-owned community health centres and the smaller sub-district hospitals. These are normally also known as the first referral units or the FRUs which should that are required to have obstetric care, newborn/childcare, and blood storage capacities at all hours every day of the week. The final referrals are to the larger district hospitals or the government-owned medical colleges that comprise the tertiary system of the public healthcare system. It is already known that the private sector consists of 58% of the hospitals in the country, 29% of beds in hospitals, and 81% of doctors.

Ayushman Bharat Yojana launched exactly a year ago re-labels the 1,50,000 sub-centres and PHCs as ‘health and wellness centres. The main role of the sub-centers is envisioned to educate patients on non-communicable diseases as well as maternal and child health. The proper treatment and education of patients in these sub-centres and PHCs is supposed to reduce the load on the CHCs and the tertiary care centres.

However for the Primary Healthcare System to deliver its objective it needs to be manned by skilled workers comprising paramedics, nurses and doctors. And it is here that there are gaps that prevent this from being a robust system of primary healthcare delivery.

It is estimated that though 70% of the Indian population lives in villages, only 40% of India’s total health care workers work in rural India. Approximately 2,000 PHCs in the country are without doctors, 50% of the 1,50,000 health and wellness centres do not have male health workers. Approximately 6,000 centres are without midwives and more than 4,000 centres do not have either male health workers or nursing midwives.

A WHO report estimated only 11% of the sub-centres, 13% of the PHCs and 16% of the CHCs met the minimum standards of healthcare delivery. Furthermore, it stated that only 58% of the doctors in urban areas and 19% in rural areas are medically qualified. The situation for nurses and midwives is even more of a concern with 66% of them not having even studied beyond secondary school and 89% of them not having any medical certification or

This gap is not a recent phenomenon. Allocation of public healthcare spending has been abysmally low in India since Independence. Even now the public healthcare spending still hovers around 1- 1.2% of the GDP which is lower compared to even neighbouring countries like Bangladesh which consistently spend more than double of GDP in healthcare. The spend clearly reflects in their key healthcare parameters where they outshine India. The expectations during last year’s budget were that this allocation would go up to 2.5% but unfortunately, the situation remained the same. All budgetary increases are in the area of tertiary care whereas India desperately needs strengthening of the primary healthcare infrastructure. The conversion of district hospitals to medical colleges has been long anticipated to fill the gap in qualified healthcare doctors for primary healthcare. Another area where the increased allocation is needed is for upgrading and strengthening of Nursing Services (Auxiliary Nurse Midwives (ANMs)/General Nurse-Midwives (GNMs). In both these areas, there was a cut in the last budget over the previous year.

It is hoped that this year’s healthcare budget will see the allocation go up to 2.5% of GDP and in turn this increased allocation be channelled to primary healthcare where it is needed most. For the Pharma industry, after struggling with the double whammy of Demonetization and GST, the industry would definitely expect incentives for investing in R&D. The industry faces flak for its marketing practices. The government can create incentives for the industry for spreading medical awareness, education amongst the Indian citizens, the guidelines for which can be framed and monitored periodically. The price capping on medicines/consumables though welcome for the patient will need to be done in a phased a judicial manner which will support employment and investment in the pharma industry and the healthcare industry.

Manufacturing of bulk drugs would be another area where the industry will look for the government to support in this budget that will help manufacturers to build up global capacities in order to take on the China threat. Will this Budget strengthen the health of India and its citizens and move towards the vision of ‘Healthy India’? Only time will tell.

  • Vikram A Munshi is Founder, WhiteSpace, Consulting & Capability Building. Views are the author’s own. 

Do you know What is Finance Bill, Short Term Capital Gains Tax, Fiscal Policy in India, Section 80C of Income Tax Act 1961, Expenditure Budget? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Next Stories
1Budget 2020: Foreign banks seek tax parity with Indian peers
2Budget 2020 wish list: Capital markets look to FM for tax sops
3Budget 2020: Why FM Sitharaman should prioritise infrastructure spending