Budget 2024: Health and Pharma industry eyes increase in GDP

New Delhi: Ahead of the union budget presentation which is scheduled to be presented on 23 July, Tuesday by Union Finance Minister Nirmala Sitharaman, eyes lie on the heath sector with high expectations from the healthcare and pharma sector.

Earlier this year in the interim budget, the Finance Minister Nirmala Sitharaman outlined some significant plans for India’s healthcare sector. For 2024–25, the sector was allocated ₹90,171 crore from the budget - a significant increase from the ₹79,221 crore allotted in 2023–24.

Additionally, the Interim Budget 2024–2025 included a number of noteworthy healthcare initiatives. In an effort to lower the incidence of this avoidable disease, a new campaign to encourage immunisation against cervical cancer in girls aged 9 to 14 was introduced.

The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana was allotted ₹7,500 crore, a rise from ₹7,200 crore previous year. The purpose of the Unorganised Worker Identification Number (U-WIN) platform is to facilitate 'Mission Indradhanush' and improve vaccination management.

Furthermore, the government increased financing for biotechnology research and development from ₹500 crore to ₹1,100 crore, demonstrating its dedication to innovation and better healthcare facilities.

Dr. Harsh Mahajan Chair-FICCI Health Services Committee and Founder & Chief Radiologist, Mahajan Imaging & Labs noted that the healthcare industry is still awaiting the government's promise of spending 2.5% of the GDP on healthcare. "We hope this will finally happen. Customs duties on life-saving equipment, diagnostic reagents, and machines need to be minimized. Additionally, the long-standing demand of the healthcare industry to be given industry status should be fulfilled. If we aim to be a $5 trillion economy in the next few years, we need a healthy India," he added.

Mr. Abhay Soi, Chairman and Managing Director, Max Healthcare Institute Limited, said that budget must focus on healthcare infrastructure, innovation, skill development for medical professionals, and strengthening public-private partnerships to ensure improved access and quality across the nation. "Addressing healthcare challenges will require an estimated 2 billion square feet of advanced healthcare infrastructure. To meet these needs, increasing GDP spending on healthcare to 2.5% is crucial for enhancing social insurance, expanding facilities in tier 2 and 3 cities, and advancing digital health services," he stated.

Dhananjay Singh, MD, Merck Life Science and Head of Science and Lab Solutions, Commercial stated that the primary request to the government would be to foster innovation in the country. "The government has always shown intent and vision in promoting R&D in the pharma and life sciences space by actively creating centers of excellence. Currently, India's Gross Expenditure on Research and Development (GERD) as a percentage of GDP is lower than other BRICS nations, standing at about 0.64%. The world average for GERD is 1.8%, and we hope that the government can increase R&D spending to align with the global average. Investment in R&D will fuel innovation and encourage drug discovery, especially with a number of academic institutions able to contribute to research," he noted.

Along with increasing healthcare's contribution in GDP, industry voices also demanded for an increased budget allocation is crucial for building and upgrading hospitals, clinics, and diagnostic centers. Dr. Sanjeev Singh, Medical Director, Amrita Hospital, Faridabad pointed that this investment will not only improve access to healthcare services but also enhance the overall quality of care provided to patients.

Himanshu Sikka, Lead – Health, IPE Global mentioned that the government should also look at creating a special fund/mission to address the growing concern of climate change impacts on public health. "This could involve allocating funds for research and interventions into climate-related health risks, such as the spread of vector-borne diseases and heat-related illnesses. The budget should propose measures to strengthen health systems to cope with climate-induced health emergencies, including extreme weather events, with provisions for developing early warning systems for climate-sensitive health risks and initiatives to build climate-resilient healthcare infrastructure," he added.