What the healthcare sector needs from Budget 2021?

One thing COVID-19 and the battle for the vaccine has underlined is that the healthcare sector cannot be left to fend for itself. Here is how the broad thrust can be.

January 27, 2021 10:35 IST | India Infoline News Service
Budget 2021 will be announced on 01-Feb in the aftermath of the COVID pandemic. Hence, healthcare spending, healthcare innovations and health infrastructure will assume a lot of importance. What are the broad expectations of the healthcare sector from the Budget? Remember, it is essential to move from a reactive COVID-19 approach to a more proactive healthcare management approach. It is high time, this budget makes a beginning.

Broad thrust of healthcare reforms in Budget 2021

One thing COVID-19 and the battle for the vaccine has underlined is that the healthcare sector cannot be left to fend for itself. Here is how the broad thrust can be.
  • It is time to look beyond the erstwhile Ayushman Bharat Scheme and the National Digital Health Mission and see how the pandemic can be made a case study to enhance the quality of healthcare in India.
  • It is time the government declares the health infrastructure sector as a core infrastructure focus area with similar access to concessional funding and tax concessions as offered to traditional infrastructure.
  • The budget must make the first serious attempt at a preventive healthcare system in India. With a proper national level preventive vaccination and inoculation program, the burden of lockdown could have been reduced.
  • It is time the budget gives another quantum push to alternative medicine, already identified as the AYUSH segment. Budget allocations must be made to let AYUSH play a key role in building immunity, which could be a good starting point.
  • The highly popular alternative medicine space is looking to the budget to cut down the rate of GST from the current 12% to make these medications more accessible to the common people. A model can also be set up for funding AYUSH practitioners.
10 Point agenda for healthcare in Budget 2021

With the broad agenda in place, it is essential to get down to the micro aspects of healthcare reforms. Here is what the Budget 2021 must specifically focus on to make healthcare sector in India more robust and productivity accretive.
  1. The starting point must be larger allocations to the health and wellness sectors. More than 60% of India is under 35-years of age and hence good health is critical. It can start with higher tax benefits to individuals for life and health insurance and also special tax incentives for private sector to modernize medical facilities.
  2. FDI in pharmaceuticals and make in India initiatives must be part of the budget for healthcare. Over the last 50 years, India has been pharma capital of the world. It is time for the budget to focus on bringing healthcare to Indians. As a starting point, the budget can look at introducing a National Retail Policy.
  3. With India’s percentage of spending on healthcare lower than many countries, this budget should look to rectify that imbalance. The budget must make provisions for good public hospitals, forging public-private partnerships, focus on local manufacture of medical devices etc.
  4. India has institutes of eminence like the National Institute of Virology and ICMR. The focus in the budget must be for more collaborative effort to building up the level of preparedness in diagnostic testing, contact tracing etc. It is time to incentivize R&D in drug discovery in a big way.
  5. In many countries, provision of healthcare by the private and public hospitals is free of indirect taxes. The budget can make a small start by making healthcare more affordable by making zero rating of GST for healthcare services. The tax cut will help reduce the cost of providing healthcare services.
  6. COVID has not only been physically traumatic but also mentally intimidating. In the last budget the budget for the National Mental Health Program (NMHP) was cut by 20% to Rs40cr. Budget-21 must look at better infrastructure to see how mental health can be enhanced as it is a big productivity booster in the long run.
  7. The budget must take a plunge and set up centrally funded hospital-cum-medical colleges in all 700 plus districts in India. COVID has almost made it inevitable. This can ensure easy delivery of effective healthcare at economical cost and can be a boon in handling pandemics like COVID-19.
  8. Budget must immediately focus on is centralization and digitization of all health records. That is how Israel handled the pandemic effectively. Budget must also look at a Healthcare Audit Authority to ensure review and monitoring of quality healthcare delivery across India.
  9. Budget must make a 5-year plan to ensure that all high-end imported medical equipment like scanners, ultrasound machines, ventilators are manufactured locally in India with the highest quality standards. It will be a big boost to self-sufficiency.
  10. Lastly, the Pradhan Mantri Jan Arogya Yojana (PMJAY) must be ideally extended to every individual since it is the taxpayer money that is funding these plans.
It does look like a long wish-list for healthcare but it’s probably the right time to fire on all cylinders.

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