Budget 2020: Expectations from the Healthcare Industry

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Budget 2020: Expectations from the Healthcare Industry

Union Budget 2020 – Indian medical device manufacturers keep their hopes high for a level play to contribute for Affordable and Accessible Healthcare

It’s that time of the year when India Inc. puts forth their suggestions and expectations from the Government in allocating policies and budgets for the year that will be, and healthcare is no exception. The Indian healthcare industry is on a progressive track and the diagnostic industry in particular is expected to steadily grow at a CAGR of 13-14% through 2020. Having said that, the industry looks forward to crucial government reforms that will help achieve these numbers.

While technology is expected to continue to make in-roads, I reiterate that affordability and accessibility of healthcare need to take centre-stage. I am hoping that a major focus in the Union Budget 2020 will be given to the diagnostic industry, as it is the starting point to building a Healthy and Happy India. 

Hard reality of the USD 7 bn Indian medical device industry is that imports still constitute to 72-80%. While Make in India continues to remain the central focus for the government, as an Indian manufacturer, we wish there would have been some more efforts on reducing the dependency on imports. Ironically, the government wants to reduce the healthcare cost in India; however, there is no beneficiary scheme for the local manufacturers of medical devices. As an industry body member, I expect the following from the Union Budget 2020, to encourage Make in India: 

Revision in GST rates requires immediate attention The implementation of GST has led to imported devices being cheaper by 11%. In addition, there being no import duty on blood analyzers, makes it difficult for the Indian manufacturers to compete with the Chinese imports, especially in Government tenders. The interests of the domestic manufacturers need to be protected through a revision in the GST regime so that not everyone gets the benefit of input credit.

Providing free healthcare to every citizen of India is the Government’s constitutional responsibility. It needs to focus on reducing the medical expenditure burden on general public, which currently bears almost 70 percent of all medical expenditure. While the government has exempted the healthcare services from GST, the taxation on the medical supplies and devices, ultimately is a hindrance in bringing down the cost of treatment. The common man can get some relief from this burden by a reduction in the GST rate on medical supplies, diagnostic equipment and devices. The GST rate, which currently stands at 18 percent, should be no more than 5 percent.   

Increase in import duty on finished goods – Even now, the import duty on raw materials is higher than that on finished products. In fact, the import duty levied by India is the lowest among all the BRIC countries. To reduce the dependency on imports, we expected the Government to provide reasonable tariff protection for enabling Make in India.

Tax holiday To encourage R&D in India, we expected the Government to provide weighted tax deduction on expenditure made on R&D of medical devices. 

Encouraging exports – Introduction of export incentives would lead to further encouraging this growth engine for the economy and help India become a global leader in medical devices. 

Preferential pricing for quality – While ICMED (India’s first homegrown quality certification) is a great initiative to encourage quality. The government needs to incentivize it further through preferential pricing for quality instead of the lowest price in public healthcare procurements. 

This in effect, would then fulfill the Government’s commitment to an affordable healthcare system.

A new decade calls for newer thoughts and from the forthcoming Union Budget 2020, the Healthcare sector has a wide gamut of expectations.


India has one of the lowest spending on healthcare if compared with global data. We know that India is aiming to increase the healthcare spending to 2.5% of the GDP by 2025,  however so far it stands at 1% only. We hope to see some action around this in Budget 2020. Government needs to declare some sops to raise this percentage.


There is an overall slowdown in expansion plans of  private healthcare players. The government has to increase its intent to collaborate with private sector, so that they understand the financial modus operandi of the private players better. Budget must pay attention to the financial viability of private healthcare by relooking at the pricing controls, reviewing the existing rates of the Government healthcare schemes, releasing the money stuck with CGHS, ECHS etc. which hugely affects the already hit liquidity balances of the existing players. Unless these are addressed in concrete terms, it will be difficult for new entrants to seamlessly operate in the current business scenario.


We also hope that the Budget will focus on home healthcare services. Other critical aspects to be addressed include good governance, a robust system to procure and supply medicines, devices as well as a connected health information system.

With the spiralling healthcare costs, the limit for tax benefit must be raised accordingly. Considering that the cost of treatment for life-threatening diseases is generally much higher, Government should try to work out a higher percentage of deduction which will go on to benefit the common man. Individuals should be exempted from the GST as they have covered themselves under insurance for their health protection. This will also bring down the cost of a policy, making health insurance more affordable.

Cost of medical equipment is another pain point, which requires support in the Budget, as this will make the medical devises & equipment, a part of Government’s ambitious programme of Made in India, which will accelerate growth in this sector. Critical healthcare equipment such as ventilators, wheelchairs, crutches, and medical equipment spare parts should be exempted from GST in Budget 2020. This will help make quality healthcare more accessible.

Innovative, tech-based, and affordable healthcare solutions are the need of the hour and our expectations from Budget also revolve around the same. We do hope that the Government promotes more healthcare startups which will digitize healthcare better, increase accessibility & affordability and give a boost to employment generation as well.

The market for healthcare start-ups and digital healthcare devices is robust. Government must support to promote domestic innovations and provide incentive to domestic device manufacturers. This will enable us to reduce our dependency on foreign imports. This will not only boost the Indian start up cluster but also make healthcare market more economic.

Mr. Takashi Maki San, Managing Director – Sakra World Hospital says, “The increased spending on healthcare is a welcome step. Now, we look forward to increasing FDI and larger Public-Private Partnership (PPP) to make healthcare more accessible to everyone. The increased investments and partnerships will also bring in latest technologies, making healthcare affordable.”


Alternative medicine, particularly homeopathy has not received the attention it deserves in the last few years from policy makers. As a result, there are several areas in the delivery and availability of homeopathic health services that need attention. Budget allocations need to bear these requirements in mind and attempt to meet them.


Access to homeopathic services

There needs to be a steady increase in the number and capacity of the central government run homeopathic clinics with the increase in population density in urban cities. As connectivity and population increases in semi-urban and rural towns and cities, homeopathic clinics need to be opened in these as well.

Patients who want homeopathic treatment are forced to opt for conventional medicine due to difficulties in accessing subsidised homeopathic treatment.


Availability of homeopathic health services through ‘Ayushman Bharat’


This highly commendable scheme by the government of India needs to include homeopathy. Public-private partnerships between private homeopathy practitioners and the government can be struck. Government outreach and planning can easily accomplish this.

Homeopathy should also be made readily available at primary health centres as on option for those patients who want it.


Most government health centres are held in high regard by the patient. Highly trained doctors of conventional medicine are aware of the limitations of their science. The deployment of homeopaths in these centres can result in a referral from these doctors to homeopaths for conditions that do not respond to allopathic treatment. This will result in minimal time loss for the patient and reduce the burden on conventional doctors.

This facility will be very important in the primary, secondary and tertiary health centres.

In primary centres conditions likes viral infections of the respiratory system, allergies, a large number of skin ailments and other conditions can be referred to homeopaths.

In secondary and tertiary centres, patients with advanced cancers requiring palliation, patients of organ failures and other serious illnesses can be referred to homeopaths.

At every level of the national health services homeopathy should be available as an add on treatment whenever requested since homeopathy does not adversely interact with conventional treatment.


For a country that recognises the importance of complementary medicine as evidenced through the creation of a ministry devoted to it, providing funding and training for these steps to be taken is the next logical step. Training also needs to be provided to conventional doctors for spreading awareness of the conditions that have limited scope in allopathy and are better and more safely managed with homeopathy.


Establishment of centres of excellence in homeopathy


The high standards of training homeopaths need to be maintained. The National Institute of Homeopathy, Kolkata needs an injection of funds for a large scale revamp and for increasing its patient handling capacity.

Similar centres need to be established in the different corners of the country – particularly the National Capital Region.

Significant funding is required for funding research related to homeopathy. This area of research is not limited to clinical trials (which are extremely important) but also fundamental research which delves into understanding the mode of action of homeopathic medicines and ultra dilutions in general.

Funding to establish research partnerships with institutes of excellence like the Indian Institutes of Technology can yield significant results which will stand up to the highest levels of scientific scrutiny.


Dissemination of Information and increasing Public Awareness


Steps are needed to address concerns which the patient population may have related to seeking homeopathic treatment. These need to be addressed and doubts need to be clarified through aggressive yet non-sensational media outreach by government bodies like the Central Council of Homeopathy and the Central Council for Research in Homeopathy. This will serve as a reliable, truthful source of information to combat any biased projection or misinformation circulating in the media.

“The government should set aside funds to support the development of a federation of healthcare data. This will be the biggest lever for research and growth in the sector and without a government level push, individual players will be unable to do a whole lot. Second, the government should set aside incentives for organizations that are collecting, storing and streamlining their data assets in a manner that allows for the deployment of the data protection bill.


Despite the intention of the government to promote data privacy through proposals such as the Digital Information Security in Healthcare Act (DISHA), the reality on the ground is fraught with a lack of systems to collect, de-identify, store or control access for data. I hope that the budget will allocate funds to support data privacy initiatives as well.


I strongly believe that this next decade will be a decade of data in healthcare, the budget must reflect this focus as well”.

“Budget 2020 should focus on cost of elder care and complete non-availability of insurance. We need to fix the economic angle and create some institutional solutions with government funding and sponsorship. The budget should upgrade the medical technologies which should be specifically designed to help Indian healthcare needs. Including IVF treatment in the insurance plan will help to minimize the financial risk to the person who is seeking the help. As of now, both private and *public sectors* are not including the insurance for IVF Treatment but should come up with such covers.
Budget is eagerly awaited by medical devices space as expectations are pegged on shaping the industry to be globally sustaining. Government should continue to focus on healthcare and invest in upgrading the primary and secondary health tiers in the country. All healthcare providers should provide the quality healthcare and help to shape the better healthcare system.
More investment must be there to provide the primary healthcare infrastructure, lower cost via technology and accessibility, approach and affordable treatment. Women must be provided with the assurance that they will receive the full pay during their maternity leave and should not be discriminated for future promotions and also paternity leave for men should be increased.”
If you are planning any story around Budget – Expectations, please incorporate the quotes on behalf of Indira IVF.   

“We would like Government to partner with healthcare startups to implement their projects and help them establish quality care for the people. The budget should aim to create healthcare facilities in small towns and rural areas. Ayushman Bharat is a nice step towards universal healthcare in India but better healthcare facilities need to be implemented. There are lack of doctors in public centres and are currently not able to serve. Technologies for doctors like video conferencing and diagnostic tools helps the doctors to diagnose the patient and assisting with services across the country. Government needs to allocate appropriate budget for the development of healthcare ecosystem in the country. To provide good quality healthcare in rural India needs to be taken care of like building healthcare infrastructure in rural and remote areas. The government must help the startups to grow through the implementation of tax benefit to angle investors for investing in the startups and to reduce the GST for the new entrepreneurs.

MoHFW came up with the National Digital Health Blueprint in July 2019, we hope that the government would take significant strides in that direction with specifications in the budget towards implementation of digital health in the government hospitals.

Last year, the then Finance Minister announced that the Government of India has envisaged a national program for artificial intelligence (AI) in a bid to leverage the technology and take it to the masses, we believe that there would be bigger contribution in the form of budgetary allowance towards that. We hope that there would be specific guidelines given to government agencies on prioritizing the implementation of AI driven technologies in their organizations and departments.”

If you are planning any story around Budget – Expectations, please incorporate the quotes on behalf of Navia Life Care.

India has one of the lowest spending on healthcare globally. While it was stated that the country is set to increase healthcare spending 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 budget. 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. However, current taxation 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. Home healthcare is not recognized as a mainstream sector and should be brought under the ambit of governmental schemes like the Ayushman Bharat yojna. 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. 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 elderly, the real challenge is in terms of lack of facilities. Add to this is the cost of elder care and complete non-availability of insurance.

Data from the World Economic Forum indicates that over 77% of Indians will be under the age of 45 by the next decade. However, despite being one of the youngest countries, we are also the most unfit with estimates suggesting that 1 in every 3 Indians are medically unfit and suffer from preventable lifestyle disorders. In the last five years, the government has exhibited a keen interest in the revival of Yoga. The hon’ble prime minister has personally taken a lot of interest in positioning Yoga as a universal exercise that can help people stay fit, look good and be healthy. While these have been welcome and have helped encourage players like SARVA who are ensuring that there is a more organized and holistic approach to the concept of yoga, we still have a long way to go. Preventive health and wellness is the need of the hour for each given the high instances of disease and lifestyle-induced illnesses in our country. In order for holistic health to be made more attractive to consumers, it is important that the tax component on commercially-run Yoga practices and institutes be revisited since yoga can help address chronic medical ailments and fill the gaps in traditional healthcare.


Under section 80D of the Income Tax Act of 1961, taxpayers can claim tax deductions on health checkups and health premiums; preventive wellness, however, is still placed under a high tax bracket. This year however we hope that the budget goes beyond providing tax deductions to those getting back to good health after falling sick but also supports and incentivize those who take care of their own fitness. This could potentially include fitness services such as memberships to gyms, fitness studios, commercially-run yoga centers, etc.

The government had pushed for affordable and accessible healthcare in its last term, and we hope that this year’s budget will also have some concrete action plans to realize this vision. Innovative, tech-based, large-scale and affordable healthcare solutions are the need of the hour in India and our expectations from the budget also revolve around the same.


We hope the government will simplify regulations for pharmacies buying medicines from GST paid channels. There should be 100% input credit for such entities and the working capital must be freed even under circumstances where the manufacturer or authorized distributor have erred on paying the deposit. The retailer has no recourse to anyone else nor the margins to absorb the entire GST as is the case today. We also hope the government will consider offering income tax breaks to affordable medicine providers like Dawaa Dost as this will make them more accessible to the masses. There can be specific provisions for the creation of a sunrise industry for providingincome tax subsidies for hiring new talent from a PF contribution standpoint, accelerated depreciation on stores, and subsidy on technology development via grants. There is a huge opportunity in terms of building a new industry and the need of the hour is for government support like the one provided to the IT sector two decades back.

The start-up ecosystem in India is thriving thanks to some conducive government policies announced in the last budget. Given this, startups in all sectors including those focusing on healthcare and health tech innovation are going to witness rapid growth in the years ahead. However, the issue that needs to be addressed at the outset is India’s current healthcare infrastructure and allotted budget which are not adequate to ensure universal healthcare services to all. This is where innovations in medical devices and services come into picture and we hope the budget will focus on this aspect. A growing number of tech-enabled companies like Agatsa are stepping in to provide specialized healthcare monitoring solutions through portable devices using cutting edge technology. The need of the hour therefore is to provide adequate funding and support to fuel further innovations under the Make in India and Digital India campaigns.


While the market for healthcare startups and digital healthcare devices is robust, we also need more support from the government to promote indigenous innovations and provide an impetus to domestic device manufacturers. We would like to see the government procure more Indian products from the market so that our dependency on foreign imports can be brought down to a minimum. This will not only boost the Indian startup niche but also make healthcare services more affordable for the common people.

The femtech industry has a huge potential and is expected to reach $50 billion globally by 2025, as per estimates by Frost and Sullivan. Though this is a relatively new industry, it aims to address some of the age-old problems women have been facing and is projected to be the next big thing in the women’s health and hygiene market.  It promotes the use of digital health applications such as hygiene products, diagnostics, reproductive health monitoring systems, etc. to help women take control of their health. Given this, our expectation from the budget 2020 centres around government policy and regulation to enable ease of doing business through centralized policies. This will also attract more foreign investment opportunities in the segment. There is also a need to simplify the taxation process and make early stage funding easier. While the government has done well in terms of facilitating foreign investments in India, this outlook needs to be maintained going forward to effectively promote more innovations under the Make in India campaign. Even though there is immense potential, the investor confidence in the Indian femtech industry is still considerably low – and we hope the policies to be announced in the budget ahead will be an enabler.


Sahil Saini

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