Budget 2021 Expectations: Why Modi govt must focus on Ayushman Bharat, Atmanirbhar India for health sector

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New Delhi | Updated: January 27, 2021 2:17 PM

Budget 2021 Expectations for Health: Ahead of the Budget 2021, experts in the medical and health sector have expressed high hopes that the Modi government will further boost Ayushman Bharat and self-reliance of the health industry.

Budget 2021 Expectations for HealthBudget 2021 Expectations for Health: The COVID-19 pandemic has taught the world the importance of health and its due care.(Representative image by IE)

Budget 2021 Expectations for Health: As the Covid pandemic challenged the capacity of India’s public healthcare system, the Narendra Modi government stressed on “Ayushman Bharat” and “Atmanirbhar India”. Now it’s time for Union Finance Minister Nirmala Sitharaman to focus on these two aspects in the February 1 Budget 2021 to tackle the detrimental effects of the Coronavirus pandemic.

Ahead of the Budget 2021, experts in the medical and health sector have expressed high hopes that the Modi government will further boost Ayushman Bharat and provide an impetus for self-reliance of the health industry. They have put forward a number of suggestions in this regard.

“The COVID-19 pandemic has taught the world the importance of health and its due care. Keeping in consideration the immense contribution of the healthcare sector during the pandemic, the sector deserves good attention from the upcoming Union Budget. The total expenditure by the Centre and states for FY20 was 1.29% of GDP which is way lower than in most countries. The foremost expectation is that the Budget should focus on increasing public spending on healthcare. Other than that, there is a significant need for reviving the local demand. There is an urgent need to provide the viability gap funding by the government for investors who set up hospitals in smaller cities to increase the provider base for Ayushman Bharat. It can be coupled with an increase of package rates of Ayushman Bharat for more hospitals. There is also a dire need to focus on research and development initiatives in collaboration with private sector players with academia, scientific experts, and governments to undertake drug discovery. Considering the GST scenario, the government can make healthcare more affordable by taking an immediate step of making ‘zero rating’ of GST for healthcare services. This will help in achieving two objectives – keep the credit chain intact and ensure that tax is not loaded into the cost of healthcare services,” Dr. Dharminder Nagar, MD, Paras Healthcare said.

“During the last budget when COVID-19 was gripping the world, the total health outlay was Rs 69,000 crores, amounting to 1.6 per cent of GDP against an aimed 2.5 per cent, of which the Ministry of Health and Family Welfare received about Rs 65,012 crores. The allocation for Ayushman Bharat remained the same at Rs 6,400 crores whereas the cost varied between Rs 17,000 to Rs 27,000 per hospitalisation even before the pandemic. With the pandemic forcing a monumental shift in priorities, it is important to make clear financial provisions for digitisation of Indian health systems as well as breaking its silos,” said Kamal Narayan Omer, CEO, IHW Council.

“Around 77 million diabetics in India, makes us the diabetic capital of the world. Our government must stress the importance of holistic wellness to better manage lifestyle diseases. The country needs more General Physicians (GPs) practising and residing in Tier II and III cities, and a system should be created for GPs to be the first point of care before a patient directly consults a specialist. It is impossible to reduce our disease burden without a robust primary healthcare system, which requires GPs. Such facilities can then administer education towards PCOS, cervical cancer, HPV vaccine, sexual health, hygiene, and even better nutrition,” Amritah Sandhu, Founder & Director, CareIndia Health- a wellness pharmacy said.

“Firstly, as a manufacturer of a key lifesaving medical device such as ventilators and related equipment, we deeply appreciate what the government has done so far to boost the domestic manufacturing of ventilators. However, now that the budget is less than a month away, we expect the government to even go a step further. For instance, in continuity with the spirit to promote indigenization with the larger goal of moving towards an Atmanirbhar Bharat, the government could consider raising import duties on medical devices valued at less than 50 lakhs to a flat 25 per cent from the existing 0 to 10 percent. As a corollary, it should also abolish custom duties on raw material imported to be used in the manufacturing of medical devices domestically. With the 5 per cent healthcare cess and social welfare surcharge amounting to anything between 1.5 per cent to 2 per cent, the cost of the raw material in total rises by about 7 percent rendering the final domestic product somewhat less competitive. Furthermore, the government should also come up with preferential policies in terms of financing of medical devices such as easy loans, long-term maturity etc. In addition to providing for government-backed warehousing facilities at city levels for medical device manufacturers, any government tender for medical devices must reserve at least 60 per cent of the total contract value, irrespective of the actual amount, for domestic manufacturers in terms of procurement. These measures would further catalyze the ongoing drive towards accomplishing an Atmanirbhar Bharat,” Ashok Patel, Founder and CEO, Max Ventilators said.

“The year gone by has once again served to remind us of the need to improve India’s healthcare infrastructure and accessibility. It has also underscored the need to make biomedical research a central pillar of our healthcare and pharma sectors. While the main thrust of the upcoming budget needs to be on economic revival and job creation, healthcare and pharma sectors must also get their due. Increasing healthcare allocation to atleast 2.5 per cent of the GDP has been a longstanding commitment of the Indian government, we expect this budget to make a significant move in this direction. The government must find ways to ensure that its flagship Ayushman Bharat scheme does not take a backseat due to fund crunch. In a recessionary phase when disposable incomes have fallen for millions of people, the need for channelizing public healthcare support is more intense,” Nikhil K Masurkar, Executive Director, ENTOD Pharmaceutical said.

“A strong element of increasing healthcare allocation must also be increasing funds available for health and medical research. Giving the pharma sector adequate policy support in this quest to become self-reliant is another expectation. Not just drug manufacturing chain but indigenous drug discovery efforts also need a major self-reliance boost. In this line, we would like to hear concrete announcements on the Department of Pharmaceuticals’ plans to create a separate department for R&D and institute a dedicated R&D head. India must set itself a target of becoming atleast a 10 per cent contributor of new drug molecules globally over the next 20 years. Creation of a dedicated public-private-academia initiative to boost new drug discovery must be considered. At the same time, the Production-Linked Incentive scheme that has been a cornerstone of government’s efforts to boost local bulk drug production must be supplemented with additional support announcements such as incentives for companies investing in R&D and earning patents. In terms of promoting indigenous production of APIs and KSMs, the government must also undertake measures to support the private sector that is likely to face the challenge of escalating costs. It is important that the Government finds a way to subsidize production for the next few years either through public laboratories or through public private partnerships. Overall, there is need to create an ecosystem that supports new innovations rather than just generic drug production. Also, GST for medicines should be 5 per cent instead of 12 per cent,” Nikhil K Masurkar said.

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