Union Budget 2023: Ahead of the Union Budget 2023, industry experts particularly from the health-tech and MedTech sectors empahsised on the need for fund allocations and enhancement of infrastructure.
According to the recommendations of the 2021 Economic Survey, the government spending on healthcare should at least be 2.5% to 3% of GDP. It also suggests that over the past 15 years, private health insurance expenditure has jumped from 1.6% (2004-05) to 6.6% (2018-19).
Experts told Financial Express.com that India’s out-of-pocket expenditure on health remains high even as government expenditure on health has also gone up over the years.
The health budget needs a significant and transformative push to protect our citizens from plunging into poverty due to debt related to unexpected medical expenses, industry experts told Financial Express.com.
Ayushman Bharat Digital Mission (ABDM) and Telemedicine
Vikram Thaploo, CEO, Apollo Telehealth told Financial Express.com that the government’s efforts in rolling out an open platform for the Ayushman Bharat Digital Mission and launching the National Tele Mental Health Program are genuinely noteworthy.
However, additional funding allocations are required to further accelerate the expansion of the healthcare sector, particularly telemedicine.
“The 15th Finance Commission recommended the Centre increase healthcare spending and indicated that public health spending in India should account for 2.5% of GDP by 2025. The Center is expected to spend around Rs 86,000 crore in FY23, somewhat higher than the Rs 84,000 crore authorised in FY22. The Indian healthtech market had a $1.9 billion market value in 2020. With a 39% CAGR, it is projected to reach $5 billion by 2023,” Thaploo told Financial Express.com.
From 2019 to 2024, the digital healthcare market in India, which was valued at INR 116.61 billion in 2018, is expected to grow at a CAGR of 27.41%, reaching INR 485.43 billion. The industry is growing at a spectacular rate as a result of its expanding coverage, services, and rising investment by both public and private participants, he said.
With more technological innovations expected to revolutionise the healthcare industry in the years to come, it is imperative that the budget must be well allocated to initiate new innovations.
“This is especially important in a country like India where digital technology can help bridge the gap in healthcare. Increased allocation of funds for home-based care, promotion of telemedicine services and national digital health mission implementation will further help build a strong healthcare ecosystem in India. There should also be a renewed focus on R&D in different medical fields to strengthen the present standing. Overall, we are anticipating a rise in fund allocation of 2.5-3 per cent of the GDP with regards to the healthcare sector,” he added.
Shravan Subramanyam, Managing Director, Wipro GE Healthcare Pvt Ltd. told Financial Express.com that from the coming budget, they expect the further strengthening of ABDM along with the implementation of cybersecurity and data protection policies in consultation with the industry.
“Against the backdrop of India’s nationwide 5G rollout in 2022, key announcements on allocations and policies that can influence 5G deployment for faster and safer healthcare delivery are awaited. With rising incidences of both communicable and non-communicable diseases post COVID 19, further strengthening of infrastructure and bridging human resource and skill deficiencies for care area deliveries across Tier 2- Tier 3 cities, semi-urban and rural areas focusing on promotion, prevention, therapy and post care is expected from this year’s budget,” Subramanyam said.
Incentives for online medical learning and training providers
Deepak Sharma, CEO, MedLern told Financial Express.com that the pandemic battle has further exposed the acute deficit in terms of the availability of trained healthcare workforce in the country.
“As such, we hope that the government in the upcoming budget suitably incentivizes online and specialist medical learning and training providers by way of a range of financial and tax subsidies. This would help the latter to bring in the most advanced and sophisticated training programmes for not only doctors and nursing staff in the country but also paramedics and others who are usually present on the ground in emergencies and critical care situations,” Sharma told Financial Express.com.
According to Sharma, in addition to catalysing access to top-class learning and skill sets to smaller towns and the hinterland, it would also help the cause of Continuous Medical Education (CME), an integral part of the upskilling of healthcare professionals.
“In fact, we hope that online and digital educational platforms providing both basic and niche training services for medical students and professionals are completely exempted from GST. In the budget, while the finance minister is likely to focus on chronic care, expanding health insurance and further accelerating ABDM, it would also continue with and expand the scope of PLI-type financial support and clustering programmes for infrastructure support for pharma and medical device segments with a view to achieve Atmanirbharta for the country,” he added.
Incentivise domestic capital to fund Indian startups
Dr.Preet Pal Thakur, Co-founder of Glamyo Health told Financial Express.com that they expect the Union Finance Minister, Nirmala Sitharaman, to rationalise tax compliance, especially the aspect of tax withholdings.
“…to encourage Indian start-ups getting domestic capital, tax rates for resident investors should be harmonised at par with the Foreign investors. We also expect the government to increase the healthcare outlay to INR 1 Lakh crores,” Thakur told Financial Express.com.
Archit Garg, Co-founder of Glamyo Health told Financial Express.com that Incentivising domestic capital to fund Indian startups in their growth phase would be encouraging.
GST offset to promote digital therapeutics
Dr Arbinder Singal, Co-founder, and CEO, Fitterfly told Financial Express.com that there is a need to prioritise interventions that facilitate the management and remission of lifestyle disorders such as diabetes, heart disease, and other forms of preventable illnesses.
“In the post-pandemic scenario, while the budgetary allocation for conventional healthcare needs to be increased, a lot of attention is also needed on alternative healthcare delivery methods,” Singal told Financial Express.com.
According to Singal, there are existing policies, guidelines, and programs to boost hospitals and OPDs or to incentivize clinicians. However, the need of the hour is reforms like a GST offset to promote digital therapeutics.
“When the service providers can accrue tax benefits, they are more likely to pass on these benefits to consumers and make the services more affordable. Such tax reforms alongside the promotion of technology like digital therapeutics for disease management and prevention can significantly reduce the burden on conventional healthcare. US and Europe are already speeding up digital therapeutics adoption. This will not only lead to a greater quality of life for the public but also superior productivity and economic output. We hope that the upcoming Union Budget will focus on these areas,” he added.
Anish Bafna, CEO & MD, Healthium Medtech told Financial Express.com that reduction of custom duties on raw material, removal of the additional 5 percent health cess and increasing export incentives under Remission of Duties and Taxes on Export Products Scheme (RoDTEP) remains critical for trade margin rationalization.
Significant public investment to enable digital access
According to Prashant Tandon, IAMAI HealthTech Committee Chair & CEO & Co-Founder, TATA 1MG, with the government playing the role of the Payor, private companies should actively participate in the delivery of digitally-led healthcare service across the board.
“Given the multiplier impact of healthcare access, private healthcare investments in tier 2+ towns must be given tax incentives and financing support and grants,” Tandon told Financial Express.com.
According to Tandon, the Indian HealthTech sector has been witnessing significant recognition and expansion over the past few years, and the Union Budget of 2023 is an opportunity to bring new energy and initiatives to strengthen the sector.
“India has a unique opportunity to lead the world with new models of digital access to healthcare, which can serve not only emerging markets but also developed markets given that countries across the globe face significant inadequacies around healthcare access and affordability,” Tandon told Financial Express.com.
Tandon emphasised that with government playing the role of the Payor, private companies should actively participate in the delivery of digitally-led healthcare services across the board.
“Given the multiplier impact of healthcare access, private healthcare investments in tier 2+ towns must be given tax incentives and financing support and grants,” he added.
He also pointed out that there is a need of supportive Regulatory Overhaul of key aspects. “The Government should lay clear guidelines of digital therapeutics, e-Diagnostics, medical devices and technologies besides suggesting relevant modification of Acts and Rules to promote Generics,” he added.
eHealth platforms providing healthcare access should get the same tax treatment as healthcare platforms and they should be considered as eHospitals from a taxation perspective, he said.
Adequate Investment in R&D
According to Vineet Gupta, Director-Government Affairs at Varian Medical Systems, adequate investments in R&D can help advance the industry and make India a ‘global centre for X-ray emitting.’
“The returns with higher investments in R&D will boost innovation. In India, the building up of capabilities in technology and process transfer, hampered by the pandemic, will take 3-5 years to be restored,” Gupta told Financial Express.com.
He also emphasised on the need to retain the existing duty Structure for the X-Ray emitting units like Linear Accelerators, Cath Labs, Mammography machines.
“I would also like to emphasise on the need to retain the existing duty Structure for the X-Ray emitting units like Linear Accelerators, Cath Labs, Mammography machines. An increase in import duties will directly affect hospitals and patients who are already facing financial strain due to the pandemic. As a result, patients will have to pay more for availing healthcare services. Moreover, this will also hamper clinical service providers from expanding their services outside of metro cities,” he added.
Dr Sudhir P Srivastava, Founder, Chairman & CEO, SS Innovations told Financial Express.com that the government should give additional benefits and will focus on indigenously developing medical infrastructure such as surgical robotics and other medical equipment etc. in India.
Meanwhile, Bafna told Financial Express.com that relooking at the tax and tariff structures on medical device imports would go a long way to provide some leeway for the industry to flourish and consequently boost the domestic R&D ecosystem.