As the coronavirus pandemic continues to wage on, people have started prioritising their health over most things. The pandemic, especially during the Delta wave, exposed several gaps in the healthcare system. In view of these challenges, the government announced policies like production linked incentive (PLI) scheme for domestic manufacturing of active pharmaceutical ingredients (APIs) and the National Digital Health Mission (NDHM).
The healthcare industry is eyeing a rise in the Centre’s budgetary allocation towards the sector and more public-private partnerships to strengthen indigenous manufacturing of essential equipment.
Aakash Healthcare Managing Director Dr Aashish Chaudhry said, “The last Budget announced a 137 per cent increase in healthcare spending to address some of the gaps. Healthcare accounted for about 1.8 per cent of GDP in 2021. We should aim to raise it to at least 2.5 per cent of GDP this year. Despite the focus on the COVID-19 pandemic at the moment, it is critical to increase the proportion of spending on preventive healthcare and wellness. Ayushman Bharat is undeniably a positive step toward achieving the goal of universal healthcare; however, more funding is required to ensure its long-term success.”
Indian Spinal Injuries Centre Chief of Strategy Sugandh Ahluwalia believes that the pandemic has highlighted the need of high-quality hospitals. “India’s total healthcare expenditure is significantly lower than that of other countries. The pandemic has highlighted the critical need for high quality public hospitals. More public-private partnerships are required to strengthen indigenous manufacturing of medical devices, personal protective equipment (PPE) and raw materials for drugs,” she said. Ahluwalia added that the government should also focus providing higher tax breaks for the private sector to modernise medical facilities, which will ensure better healthcare, more investments and job creation.
Deloitte India, in its pre-Budget expectations booklet, recommended tax holidays for rural hospitals with flexibility to select beneficial years and viability gap funding by the government for setting up hospital in tier-1 and tier-2 cities. According to Deloitte, this would make healthcare an attractive space for investment and strengthen country’s healthcare infrastructure.
The firm also recommended a weighted deduction of expenses incurred on skill development due to the shortage of manpower in the healthcare sector. “This would facilitate government to achieve its aims of WHO recommended doctor patient ratio of 1:1000 by 2024,” said Charu Sehgal, Partner, Life Sciences and Health Care Leader at Deloitte India.
According to senior vice president of NATHEALTH and Managing Director at Wipro GE Healthcare Dr Shravan Subramanyam, coronavirus pandemic has mandated self-reliance for India. “COVID-19 pandemic also necessitated self-reliance for India, ‘Atmanirbhar Bharat’. For Indian MedTech sector to be viable, NATHEALTH recommends waiving off the duty and CESS and releasing sectoral payment dues, to free up the working capital for investments in inventory of critical spare and lifesaving equipment. To scale-up and move towards Universal Healthcare Coverage, collaborative efforts from stakeholders across public and private sector will be pivotal,” Subramanyam said.
Chief Financial Officer at Paras Healthcare Debajit Sensharma expects the government to allocate a budget towards inclusion of trauma centres in Primary Health Centers (PHCs) and Community Health Centers (CHCs) as trauma systems result in high financial costs. “Our country has the youngest workforce, but with dropping fertility rates and increasing mutations, there will be a huge spike in healthcare expenses over the next couple of decades,” he said. Sensharma added, “The need of the hour is to improve healthcare funding with subsidised loans, incentivising CSR investment by making it a tax-deductible expense and allocating land for new hospitals.”
According to Confederation of Indian Industry’s (CII) Pre-Budget Memorandum 2022-23, the government should raise public investment in health to at least 2.5-3 per cent of GDP by 2025 from 1.29 per cent at present and create REITs on healthcare which would invest in infrastructure. It also urged the government to create a medical innovation fund to support companies with the capital to promote digital healthcare infrastructure. The industry body’s Pre-Budget Memorandum 2022-23 also noted the government’s Digital Healthcare mission should consider providing fiscal incentives for the creation of hybrid cloud models.
This includes on-premise capability to ensure data protection within the territory of the country as against a public-cloud model. It also urged the government to provide ‘job stamps’ to benefit workers in health centres. These ‘job stamps’ can be used to pay workers hired at the minimum wage through government certified placement agencies that register the unemployed and later monitor the work.
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