Budget 2020: Reaction by Indian Medical Industry
Mr. Rajiv Nath expressed deep disappointment and anguish over the Union Budget 2020 giving cold shoulder again to the Indian Medical Device Industry.
2 years back Finance Minister announces Duty increased to 10% up from 7.5% and in evening we saw notification reversing this to 7.5% . This year FM announces taxation will drive public healthcare funding but the fine print states it as cess so if duty on a device was 5% it becomes 5.25 % effectively ! Only a meagre increase of 0.25% to protect domestic manufacturing and motivate traders to become manufacturers.
AIMED after going through the fine prints of the budget finds out that only a meagre increase of 0.25% is given whereas the Medical Devices Industry thought 5 % cess on Basic so it’s 5+ 5 = 10%
Today when India faces the coronavirus epidemic what’s India’s preparedness and health security of our country?
60% of gloves we consume, we import even if we are the 4th largest latex – rubber producing nation in world. Our own manufacturers import non sterile latex examination gloves and market these under their brands – not a single manufacturer bothers to produce these low priced examination gloves if the duty on these is zero %. Tomorrow if China can’t supply due to factories being shut and Malaysia has to give priority to China, India does not have the capability to take care of health security of its citizens due to such apathy to protect its manufacturing. Similar is the case of many other medical devices whether thermometer or hot water bottle or adhesive bandages.
We were expecting the government to move forward on promised reforms and anticipated conducive measures to boost domestic manufacturing of the medical devices. It is frustrating that against our expectations, the government has not included any measures to help end the 80-90% import dependence forced upon us and an ever increasing import bill of over Rs. 38,837 Crore & promoting growth Indian Medical Device industry.
Commenting on the Union Budget 2020, Dr. Prathap C Reddy, Chairman, Apollo Hospitals Group said, “A farsighted budget, it is commendable that the Hon’ble Finance Minister has announced innovative initiatives that will enhance ease of living, improve the health quotient and boost opportunities for education & job creation, for all sections of our society and meet the expectations of an aspirational India.
In the present day, an evolving healthcare ecosystem is being defined by new challenges. As the Hon’ble Finance Minister said, by 2030, India will have the largest working age population in the world and therefore, more than ever before, addressing Non Communicable Diseases(NCDs) must be India’s immediate imperative as the prevalence of these diseases is being witnessed increasingly in the younger segment of our population
NCDs are responsible for two-thirds of the total morbidity burden and according to the World Economic Forum, by 2030, the world could lose over 30 trillion dollars and about 36 million people could die every year due to NCDs if rapid remedial action is not taken up. Hence in addition to initiatives announced to improve access to medical care across the nation and boost human health resources, it was encouraging that vital determinants of good health which include wellness, nutrition, clean drinking water and sanitation were at the forefront of this Budget. Likewise, the ‘Fit India’ programme championed by our Hon’ble Prime Minister personally, will certainly motivate a greater focus on fitness amongst Indian citizens.
Furthermore, we are hopeful that in the near future, a nationwide health screening programme for all citizens is initiated, which would empower every Indian with awareness about their health status and help them make lifestyle changes as needed. This is critical to prevent, avoidable mortalities.
Budget 2020 is a definitive step forward in the Government of India’s commitment to make India healthier and a model for the world to emulate.”
Union Budget 2020: Indian heartland continues to wait for affordable diagnostics
“Looks like a good budget for healthcare sector but with crucial lacunae still not addressed. Allocation of Rs 69,000 crores to healthcare sector is surely a welcome step, including the new “TB harega, Desh jeetega” project to eradicate TB by 2025.
It’s good to know that the government plans to expand the Jan Aushadi Kendras to all districts to provide medicines at affordable rates. On the same lines, the government needs to develop some mechanism that provides affordable diagnostics as well.
The Finance Minister’s announcement of allocating Rs. 3000 crore towards skill development is a greatly welcome move. This will address shortage of skilled manpower crucial for penetration of diagnostic centres in rural India. It is also in line with Transasia’s own skill development projects under way in the country.
However, the budget doesn’t address some of the immediate concerns of the Indian families with respect to medical costs and expenditures. The diagnostic segment, which is taxed much higher than medical services, needed relief by reducing their tax bracket. That has not been done and resultantly the common man will continue to spend high amounts on basic and advanced diagnostic tests.
While it is good that the government recognizes entrepreneurship as the strength of India and has proposed various schemes that will encourage Make in India and exports, however, important reforms needed to boost manufacturing in India have been left out of the budget.
We have been demanding reduction in the GST rate on medical supplies, diagnostic equipment, and devices from the current 18 percent to 5 percent. That would have helped in making affordable healthcare a reality.
Also, the issue of import duty tariff has not been addressed. India’s import duty is the lowest among BRIC countries, at zero to 7.5 percent – making it cheaper to import devices rather than encouraging home grown, cutting edge technology Indian devices. We had demanded the duty to be raised to 15-20 per cent, as lower import duties dissuades manufacturers from producing them in India.”
”Budget 2020 is visionary and in accordance with the policy of improving and expanding healthcare services reach to all. Make in India initiative for Medical devices industry has been given a big boost. Imposing health cess on the import of medical devices will help domestic manufacturing companies.
Further, using tax proceeds to fund the creation of healthcare infrastructure will help in address issues of capital requirements for building healthcare infra in Tier- I & II cities.
The government is focused on creating the healthcare infrastructure and invest extensively in improving healthcare services in tier I-II cities in the country. Announcement of extending the ambit of Ayushman Bharat through the establishment of PPP model hospitals in 112 new districts of India will improve healthcare infrastructure.
Increasing the budgetary allocation for the healthcare sector to 69,000 crores will enhance primary health coverage and strengthen health and wellness centers (announced under Ayushman Bharat) which will help to reduce the disease burden.”
“We are happy that the Government has announced Rs 69,000 crore for the healthcare sector of which PM Jan Arogya Yojana will get Rs 6,400 crore. This will go a long way towards ensuring better healthcare and treatment. 20,000 empanelled hospitals under Ayushman Bharat will help lakhs of poor and middle class people and this initiative of the government is a welcome move. PPP mode hospitals planned to be set up in 112 districts will further empower the poor and under privileged to avail medical services. Overall, a good budget from the healthcare sector perspective.”
We welcome the Finance Minister Nirmala Sitharaman’s emphasis on healthcare as a key agenda, and acknowledging the need to expand healthcare delivery beyond the metros and cities to Tier 2 and 3 towns.
While the outlay for healthcare has been increased from INR 62659 crore last year to INR 69000 crore, we still have a long way to cover to achieve at least 2.5% of the GDP on healthcare spend.
Ayushman Bharat is a great initiative to achieving Universal Health Coverage. In order to make quality healthcare services affordable, accessible and accountable to those in need, it is imperative for the Government to ensure active participation from all private healthcare players. It is important that the Finance Minister lays emphasis on the following to encourage participation from the private healthcare establishments, including the big-chain corporate hospitals.
- A business conducive light touch policy and regulatory environment will play a crucial role in encouraging private healthcare establishments to actively be a part of this ambitious Ayushman Bharat Scheme. India’s public health system continues to remain laggard due to inadequate funding, inability to attract and retain specialists, infrastructural gaps and weak management. Therefore, it is critical to explore alternate strategies, including engaging the private sector under the PPP model. The private healthcare establishments with their infrastructure and manpower prowess could be a game changer in addressing unmet healthcare challenges and at the same time also ensure that, available resources are used optimally and in a holistic manner.
- The current situation is that the government centres are running full but most of the private healthcare players have a scope of accommodating 20 to 30 % of patients who are covered under the Ayushman Bharat Scheme. By doing so this will bridge the gap of affordability and accessibility to quality healthcare and ease some percentage of the load off the government shoulders.
- In order to enable active participation from the private healthcare players, the Government should put in proper mechanisms in place such as: a) introduce CGHS rates which are currently prevalent in the sector b) Higher differential rates for DNB and NABH accredited hospitals c) Bring all other government schemes under the umbrella of Ayushman Bharat Scheme d) Single window upload and clearance of bills e) Payments within a stipulated 45 day period f) No deductions in payments.
- The Finance Minister should also consider bringing all different healthcare related schemes under this one umbrella Ayushman Bharat Scheme in order to encourage more private participation, including the big chain multi-speciality tertiary hospitals.
“We congratulate the government for presenting a forward looking and dynamic budget that takes into account the financial as well as healthcare needs of the nation. The government’s vision across various healthcare initiatives such as Ayushman Bharat, Mission Indradhanush and the Jan Aushadhi scheme will give desired impetus to the sector and also increase access to quality healthcare services. Tax benefit proposals will significantly benefit the middle class comprising of self-employed, small businesses, traders, salaried class, pensioners and senior citizens.”
“While acknowledging the importance of Indian startups in job creation, FM, Nirmala Sitharamanan in her budget speech proposed several measures to boost the startup ecosystem like establishing a seed fund for early stage startups and deferment of tax on ESOPs given to startup employees. This for sure will help startups like ours to attract and retain talent.
From the healthcare sector perspective, accessibility issues were addressed and setting up of more hospitals in Tier-II, Tier-III cities under the PPP model for expansion of the Government’s Ayushman Bharat scheme is a step in the right direction. It would definitely assist health-tech startups like Navia to expand it’s reach to Tier-II and Tier-III cities.
Also, even though the budget allocation of 69,000 crores to the healthcare sector represents about a 10.5% jump from 2019 in absolute terms, India’s public healthcare spending still stands at a little over 1% of GDP and it has a long way to go in comparison to other developing countries where public healthcare spending stands at around 2-2.5% of GDP.”
There are two good highlights of the budget for the corporate sector. Hundred percent tax emption for sovereign wealth funds for their investments in the infrastructure sector is expected to give a boost to the infra investments in India.
The tax dispute settlement scheme is a positive move that has the potential for quick fund infusion into Government coffers before March-end. There are also several welcome measures to give the start-up sector a big boost. With the tax changes for the middle class, the already complex tax framework has become even more complicated.
The budget did not provide much relief for the healthcare sector. The increase in overall outlay to Rs 69,000 crore, up from Rs 62,659 crore last year, is clearly inadequate considering the health challenges facing the country and the stated goal of turning India into a caring society.
The viability gap funding window for setting up hospitals in 112 aspirational districts and establishing medical colleges in district hospitals are significant steps to make healthcare more accessible and affordable. The focus on wellness and preventive healthcare is encouraging. The initiatives announced, such as Rs 35,600 crore for nutrition-related programmes, will help reduce the disease burden and improve maternal mortality rate over the long term.
With respect to the scheme related to medical devices, unfortunately, we still do not have the indigenous capability to manufacture high-quality devices here in India and thus by imposing cess, it will ultimately make healthcare services more expensive.
“We congratulate the government on presenting the Union Budget 2020 for the common man and it’s encouraging to see that the government has taken the lead to deliver on its promise of excellence in healthcare. The government’s “TB Harega, Desh Jeetega” initiative to eradicate tuberculosis by 2025 is a significant step towards building a healthy Society. India being the highest recorder of TB cases in the world makes it imperative for us to understand the high risk of catching the disease. The government’s vision aligns with our mission to raise consciousness and promote advanced diagnosis and treatment of tuberculosis among patients. Additionally, the government’s impetus on boosting the domestic manufacturing of electronics and medical devices in the country will reinforce the commitment towards raising awareness for early detection in India. Apart from this, the announcement to boost Artificial Intelligence is a great step to strengthen the usage of technology in the field of healthcare while intensifying the quality with accessibility and affordability. We believe that the government has put forward a progressive budget with a strong vision to take India’s social, economic and overall well-being to greater heights.” – said Mr. Chander Shekhar Sibal, Senior Vice President, Fujifilm India
“I would like to congratulate the Finance Minister on presenting a holistic budget specially from the perspective of enhancing access to healthcare in the country. The increased allocation to healthcare and specific focus on addressing the healthcare infrastructure gap specifically in tier 2 and tier 3 cities through PPP mode hospitals being planned to be set up under viability gap funding will significantly help us achieve our goal of Ayushman Bharat. Elimination of Dividend Distribution Tax along with incentives directed towards medical devices companies under electronics manufacturing will a big push towards ‘Make in India’ efforts for medical technology.”
“It is encouraging to see over 10% increase in the allocation of funds to the Healthcare sector for the budget 2020-21. While there has been no significant announcement pertaining to diagnostics industry, it is good to see the government’s growing focus on PPP mode ensuring accessibility and availability of quality healthcare services in remote locations. We are intrigued about how the government will use the fund of Rs 6400 crores allocated exclusively to Ayushman Bharat to the benefit of the people residing in Tier II and III cities. The expansion of government’s existing programme – Mission Indradhanush – to cover 12 new diseases and 5 new vaccines would be extremely beneficial in order to drive immunization across the country. The investment of Rs 8,000 crore for National Mission of Quantum Technology and Application is another noteworthy announcement for the healthcare industry.
We, at CORE Diagnostics, agree with the government that Analytics, IoT and AI are integral part for the growth of the industry and look forward to the implementation of this fund for R&D in the healthcare sector which will further result in innovations and advancements. As the Finance Minister rightly said, data is indeed the new oil. It is promising to see the improved attention from government on this subject in form of their support to the private sector in building data centre parks throughout the country. I’ve also spoken about the importance of genetic mapping and the announcement of the two national level schemes will ensure protection and bring more structure to the abundant national level database that we as a country already possess”.
A Fruitful budget for the healthcare sector
The government has shown its commitment towards healthy India by providing INR 69,000 crore to the healthcare sector. It has rightfully focused on bringing in several key structural reforms for the nation moving towards that goal. It is heartening to see the Government’s display of commitment and concern towards rural healthcare by announcing more empanelled hospitals under the flagship Ayushman Bharat Scheme in Tier 2 and 3 cities. The budget has rightly outlined by specifically focusing to those areas where there are no hospitals. The proposal to set up Viability Gap funding window to build hospitals in the public-private-partnership (PPP) model will widen the scope of the government’s flagship scheme, AB-PM-JAY and will provide large scale employment opportunities to youth.
It is encouraging to see the government’s support towards manufacturing high end medical devices under the Make in India program. This will increase affordability and ease of access in procuring the equipment.
On the other hand, the announcement of cess on import of medical equipment will be used for creating infrastructure for health services in the aspirational districts is accepted as a welcome move.
The allocation of ₹3000 crore for skill development which also includes hospital staff, care givers and paramedical staff increasing competency in the healthcare sector, is encouraging.
The expansion of the Jan Aushadhi scheme is a move to make affordable healthcare at the door step of the common man.
Budget 2020 brings in very positive growth for the healthcare delivery in the country. This is not a populist budget, but a budget that has far reaching positive impact on healthcare sector.
“As a health provider I am pleased that the government has taken significant measures to lay focus and cater towards the needs of the healthcare industry. Our existing TB program at the hospital will further help the country strengthen its fight against TB and support governments campaign TB Harega, Desh Jeetega. The schemes introduced to provide assistance to 20,000 empanelled hospital under the flagship of Ayushman Bharat in tier 2 and 3 cities will benefit to make healthcare accessible and affordable to the citizens, our hospital is currently also supporting the PM’s dream project.
We are delighted with the budget allotment of 3000cr for the skill development sector which has also been a foray for P.D Hinduja hospital & MRC, this will help to further develop skills of Indian healthcare practitioners to match the international standards. Also, district hospitals been attached to medical education institutes is a good thought out step by the Government that will help to increase the number of doctors in our country which is the need of the hour. However, we will need more clarity on how the big hospitals will increase its students for the DNB Courses as this will require more professors which is a limitation today. Overall the allotments in total of INR 69,000 crores inclusive of INR 6,400 crore inclusive of PM Jan Aroyga Yojana will help entrepreneurs and healthcare providers set up care centers which will help to multiply the serves to the population”.
“I am pleased that the government has built further on the healthcare agendas that were introduced last year and has increased the budget by 7% to 69,000cr. Our hospital has already been closely working with the government for treatment and prevention of TB and the special focus announced by the government through ‘TB Harega, Desh Jeetega’ initiative will help supplement our efforts. The extension of Ayushman Bharat scheme with the allotment of 6400 crs and the proposal to set up more hospitals under PPP model in the Tier-II, Tier-III cities, will help to make affordable healthcare services available to many more Indians.
The government plans to boost medical education and skill development will help in tackling the shortage of doctors and allied health professionals, which is critical for providing quality healthcare services to our large population. While the PPP model to set up medical colleges attached with district hospitals is a positive step, proper norms and protocols should be laid down to ensure quality of education and proper governance of these medical colleges. Setting up of strong digital infrastructure in the country could directly enable several technological innovations in healthcare like data analytics , AI and ML for better prevention and treatment of diseases. The steps and announced towards better nutrition are much needed for prevention of various diseases. Coverage of more diseases and vaccines under the national immunization program, Mission Indradhanush, was much needed. The facilities announced for ease of investment clearance, emphasis on infrastructure should encourage more investment and setting up of more healthcare facilities. All these steps announced in the budget will help to build a healthier India”
“It is encouraging to note the focus on Healthcare sector in the Union Budget 2020…the concept of PPP for building hospitals in select aspirational districts should help in accelerating Ayushman Bharat. Globally healthcare would probably undergo a disruptive transformation from “disease cure based” healthcare to ” preventive & wellness based” healthcare…hence emphasis on wellness,water,sanitation should augur well for India. Deployment of cutting edge digital technologies like Artificial Intelligence & Machine Learning, continued efforts to eliminate TB, broadening the scope of Jan Aushudhi program are some of the other interesting possibilities considered for Healthcare in this Budget.
It might be helpful to look at some of the unfinished agenda points for enabing further progress of the sector & good health of the nation….According “priority sector status” to healthcare could attract higher investment…Ayushman Bharat can be scaled up to cover larger percentage of population to accelerate Universal Healthcare…rationalising GST and some incentivising tax holidays can go a long way in improving the state of the sector.
Key success factor in all these will be effective implementation of the plans and programs in the states with high level of operational excellence and in the true spirit of co-operative federalism. ”