Measures inadequate to tackle a pandemic of this scale, no long-term proposals announced, say stakeholders
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India’s annual budget left the healthcare industry disappointed. The two areas that received a boost from the finance minister Nirmala Sitharaman’s budget were tele-mental health centres and the National Digital Health Ecosystem that is expected to digitize health records and create health identity for Indians.
The measures, experts said, were inadequate to tackle the immensity of the country’s crisis.
Allocation to the health ministry in the FY23 budget rose by ₹1,000 crore to ₹83,000 crore from this fiscal year’s revised estimates of ₹82,000 crore. The department of health research was allocated ₹3,200 crore, an increase from the revised estimates of ₹3,080 crore of the current fiscal. The finance ministry allocated ₹690 crore for future pandemic preparedness as part of the Prime Minister’s Ayushman Bharat Health Infrastructure Mission-BioSecurity Preparedness and strengthening pandemic research.
Experts said the focus on the mental health crisis in the budget is the most progressive step taken by the government this year.
“The pandemic has accentuated mental health problems in people of all ages. To improve access to quality mental health counselling and care services, a ‘National Tele-Mental Health Programme’ will be launched," said Sitharaman in her budget speech. The pandemic has exacerbated mental health crises across the world, and India is no exception.
The budget proposes to set up 23 tele-mental health programmes with the help of Bengaluru-based NIMHANS and the Indian Institute of Information Technology with a budgetary allocation of ₹40 crore.
The second big allocation is to digitize health records through an open platform that will have digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities. The budget allocated ₹200 crore for the National Digital Health mission.
These announcements were, however, too little to cheer the healthcare sector.
“The budget did not provide the prominent focus, a long-term strategy, and a much higher allocation for healthcare as was expected," said Charu Sehgal, partner, life sciences and healthcare leader, Deloitte India. “It appears that the intent in this year’s budget was not to make new major announcements but to consolidate and successfully implement some of the initiatives announced during the past 18 months of the pandemic."
Analysts have been expecting that there will be a fillip to the pharma sector in terms of concessions regarding the manufacturing of active pharmaceutical ingredients and regulatory pathways to speed up approvals.
“While much more was expected on the pharma front, the inclusion of genomics and pharma as a sector for supportive policies, light-touch regulation and promotion of R&D are encouraging. However, the implementation of the details remain to be seen," Sehgal said in a statement.
The industry was hoping that the long-standing demand of making healthcare allocation to the GDP by over 2% would be met during the pandemic year. “Coming out of the shadows of the pandemic, it is most important to allocate at least 3% of the budget to healthcare," said Azad Moopen, chief executive officer of Aster DM Hospitals.
Healthcare expenditure has been historically ignored during the annual budget despite the tall claims made by the government to strengthen health systems every year. The pandemic exposed the fault lines of the crumbling health infrastructure, especially in primary healthcare, that led the central government to take quick-fix measures such as setting up field hospitals, providing free covid-19 vaccines, and purchasing test kits to tackle the pandemic. “The proposals made in Budget 22-23 should have made quality healthcare accessible and affordable. The government should have focused more on primary healthcare investment and given the healthcare system a ‘National Priority’ status, as was done for the IT sector", said Alok Roy, member of the industry lobby group Ficci’s Health Services Committee.
Rajiv Nath, chairman of the All India Medical Device Industry, said he was disappointed that the budget did not include any measure that could boost the domestic medical device industry that could help the country end the 85% import dependence on medical devices. The Indian medical device industry had expected a predictable tariff policy. Increase in customs duty for imported medical devices to 10-15% from the current rate of 0 to 7%, a move that could give domestic companies an advantage over their foreign counterparts. And the reduction in GST of certain medical devices that are currently considered luxury goods and taxed at 18%.
“Sadly, the Union budget 2022 speech has no stated strategic measures to boost the domestic manufacturing. These are the same domestic manufacturers; when imports got disrupted during the covid-19 crisis, the Govt. relied heavily on them to meet the rising demand of essential Covid items for the country, pushing the Indian medical devices sector to become self-reliant", Nath said. The only silver lining for suppliers of medical goods to the government is the revision in public procurement that now mandates 75% upfront payment to companies.