Budget 2021 Expectations: More money, bold reforms, here is what India’s public healthcare needs

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New Delhi | Updated: January 25, 2021 1:43 PM

Budget 2021 Expectations for Health: While there is one week left for the Budget 2021 to be presented on February 1, here are a few suggestions put forward by experts for the health budget to the Narendra Modi government.

Budget 2021 Expectations for EducationIn Budget 2021, the government must continue to strengthen the health reforms from the previous years, to boost domestic health infrastructure, provide jobs, and increase health Insurance penetration with additional tax benefits.

Budget 2021 Expectations for Health: The Narendra Modi government is all set to present its Budget 2021 on February 1 amid the Covid pandemic. Since this will be the first Union Budget after Coronavirus hit India, the healthcare sector is hoping that Finance Minister Nirmala Sithraman will make some bold announcements paving the way for more reforms. Given the scenario, the utmost importance should be given to the public healthcare in the country, experts said.

While there is one week left for the Budget 2021 to be presented on February 1, here are a few suggestions put forward by experts for the health budget to the Narendra Modi government.

Budget 2021 must strengthen health infrastructure

“India, even with the ongoing pandemic, which is undoubtedly one of the biggest global crisis this generation has witnessed, has been able to sustainably reduce the gaps in the existing healthcare infrastructure. In Budget 2021, I expect that the government continues to strengthen the health reforms from the previous years, to boost domestic health infrastructure, provide jobs, and increase health Insurance penetration with additional tax benefits. I am also hoping that health insurance is made a mandatory subscription for every voter in the country, and by virtue of this, compliance will help reduce the burden and out of pocket expense for all voters,” Dr. G. Surender Rao, Managing Director, Yashoda Hospitals said.

“With access to the country’s ‘Covid-19 Emergency Response and Health System’ established by the Government of India, we now need to adopt an extensive, multifarious allocation and investments plan. While building a strong infrastructure, it is essential that in Budget 2021 additional funds be specially allocated towards training medical staff, establishing and improving the supply chain of vaccines, medicines and accessibility, which are fundamental for a resilient public health mechanism going forward,” Dr. Rao said.

“In the context of the COVID-19 pandemic, it is evident that expenditure made in healthcare and education are long-term investments. The world may have hit reverse on years of progress made on chronic, non-communicable, and life-threatening diseases due to the singular attention on the pandemic. It is imperative that the percentage spending of Gross Domestic Product (GDP) on healthcare and training of healthcare professionals is increased to make up for this in Budget 2021. Additionally, medical tourism, that was expected to hit USD 9 billion by 2020 (FICCI, Ernst & Young), has been affected. Focussed promotional measures and relaxation steps introduced by the budget for when borders between countries are re-opened will help to bolster the segment,” Dr. Kshitiz Murdia, CEO and Co-Founder, Indira IVF said.

Budget 2021 must make Pharma industry more ‘Atmanirbhar’

“The Government has already announced Productivity Linked Incentive (PLI) scheme for basic and innovative pharma manufacturing which is an encouragement for the Pharma industry to become more ‘Atmanirbhar’. The COVID pandemic and the development of the Vaccines have resulted in an increased awareness of the need for pharmaceutical Research and Development spending to develop innovative pharmaceutical products. Currently, as a country we have strong pharma manufacturing capabilities, however, we invest very little in innovative Pharmaceutical R&D to discover new pharma products in comparison to other countries including China and I hope the Government recognises this and provides incentives or initiatives in the Budget 2021 specifically targeting higher investment in innovative R&D,” Suresh Patthathil, MD, Allergan India said.

“To meet future needs of quality healthcare infrastructure, it is imperative to increase the overall budget allocation to this sector. The idea of Atmanirbhar Bharat should be further amplified by supporting local innovations in the field of drugs and medical devices. Providing the right resources in the form of fiscal incentives, educational support, etc. to innovators can go a long way,” Anandram Narasimhan, Managing Director, Merck Specialities Pvt Ltd said.

Budget 2021 Tax benefits to hospitals towns, rural areas

“In the Budget 2021, the government may look into extending tax benefits to hospitals under Section 35AD of the Income Tax Act to a minimum of 50 beds in tier II and III cities and a minimum of 25 beds in rural areas. This will help add more hospitals in these areas for successful implementation of Ayushman Bharat. We also request the government to provide tax benefits to hospitals investing substantially for capacity expansion, since the weighted deduction of 150 per cent has been withdrawn. To fight the pandemic, many hospitals have incurred huge capital expenditure in structural changes for COVID – 19 treatment and significant fresh investments in medical equipment like CT scans, laboratory apparatus and setting up of ICUs. Consequently, the sector also expects a weighted deduction of 150 per cent for CAPEX incurred for fighting COVID-19 pandemic,” Gautam Khanna, CEO, P. D. Hinduja Hospital and MRC, Co-Chair, FICCI Health Services Committee, President, Association of Hospitals, Mumbai said.

Affordable healthcare

“Affordability of healthcare will determine the reach of Indian healthcare in the future. Going by the current trends, 85 per cent of medical devices is currently being imported with increase in import cost expected due to currency depreciation (by 10 per cent). An increase in transportation cost has also further aggravated the operational costs. In 2020, due to lockdown, hospitals saw reduced elective surgeries but witnessed an increase in overhead costs which have significantly affected their turnover and sustainability. In the current scenario, a further increase in the cost of imported medical devices will further exacerbate affordability,” Gautam Khanna said.

Budget 2021 must focus on mental healthcare

“According to an NMHS 2015-2016 study, one out of every 20 people in India suffers from depression. Nearly 7.5 percent of the entire population suffers from some type of mental disorder. With India on the verge of a full-blown mental health epidemic, it is time for the government to contribute in funding and policy to stop the inevitable on its track. Last year, there was a decline in the allocation of funds for the National Mental Health Programme from Rs 50 crore to Rs 40 crore which meant that India spent only 0.06 per cent of its health budget on mental health care. Apart from a huge mental health resource gap, mammoth efforts need to be put towards proper implementation of the National Mental Health Policy. Other than that, issues like access to care, insurance claims for mental health being denied and lack of awareness are some of the areas that require increased attention. Hopefully, Budget 2021 will focus on a wholesome approach to address the rising incidence of mental health issues and start integrating mental health services at the primary, secondary and tertiary levels of the public health system.” Prakriti Poddar, Global Head for Mental Health at Round Glass, Managing Trustee Poddar Foundation said.

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