Budget 2020-21: While it was stated that the country is set to increase healthcare spendings to 2.5% of the GDP by 2025, it continues to stand at 1%.
By Meena Ganesh
Budget of India 2020: As we head into a new decade, there is a transformation expected in every sector, and healthcare will not be a stranger to this trend either. Technology will make inroads even as affordability and accessibility of healthcare take centre-stage more than ever before. India has one of the lowest spendings on healthcare in the world. While it was stated that the country is set to increase healthcare spendings to 2.5% of the GDP by 2025, it continues to stand at 1%. We hope to see some action around this in the upcoming Union Budget for 2020-21. Apart from this, the healthcare infrastructure in the country also needs a systematic and extensive revamp.
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A major focus must be given to the home healthcare industry, which is one of the ways to realize the government’s vision of affordable healthcare for all. There are two reasons why this is important.
- The prevalence of non-communicable diseases is on the rise and the ratio of hospital beds to the number of patients is low. Home healthcare can address this gap by enabling care for chronic or terminally ill patients at home in a hospital-like setting.
- The number of elderly will increase in India in the next decade and home healthcare is one of the most effective means of caring for them and ensuring that they stay with their near and dear ones.
However, current tax policies and regulations do not cover home healthcare and diagnostic tests, and other at-home aspects still form a large part of people’s out-of-pocket expenses. This is another critical area that we would like to be addressed in the Budget 2020. Home healthcare is not recognized as a mainstream sector and should be brought under the ambit of governmental schemes like the Ayushman Bharat Yojna in this Union Budget. We also expect to see an increase in the limits on reimbursement of expenses on diagnostics, preventive health check-ups, etc., and for home healthcare to be made a part of this exemption in Budget 2020. Critical healthcare equipment such as ventilators, wheelchairs, crutches, and medical equipment spare parts should be exempted from GST. This will help make quality healthcare more accessible.
While it is encouraging that steps have been taken to register services like elder care homes and home care agencies for the provision of care to the elderly, the real challenge is in terms of lack of facilities. Added to this are the cost of elder care and complete non-availability of insurance. Unless we fix the economic angle and create some institutional solutions with government funding and sponsorship, we would continue to fail in our ability to take care of this segment of the population, which is increasing in number.
As of now, preventive health check-ups account for less than 10% of the total market and this segment is witnessing a compound annual growth rate (CAGR) of 20%. We hope that the government will increase the tax exemption ceilings under Section 80D towards the cost of preventive check-ups in the Union Budget for FY 2020-21. This will encourage more people to opt for health check-ups and it will propel the segment to grow at a CAGR of 27% (FY 2019 to 2023).
Healthcare and increasing spending in this sector were two crucial areas that were completely left unaddressed in the Budget of 2019-20. Despite Ayushman Bharat featuring in the government’s 10-point agenda, it was disheartening to see the lack of any solid policies in the healthcare sector. We hope to see some action points on these areas in Budget 2020-21.
(The author is the MD and CEO of Portea Medica, a consumer healthcare brand in India. The views expressed in the article are personal.)