Although the Indian pharmaceutical and healthcare sector played the most significant role to minimise the threat posed by the pandemic, but the  covid -19 pandemic revealed the current state of India's healthcare infrastrcure. The industry expects some incentives from the Union Budget 2022-23. Indian Pharma Post presents below the industry's expectations: 

ICRA Healthcare

At Rs. 74,602 crore, the budgetary allocation for healthcare in FY2022 dropped by 9.8%, if compared to the Revised Estimates for FY2021. The funds earmaked for healthcare, as a percentage of GDP and beds per 10,000 population, continues to be lower for India against most developing nations. Given the ongoing pandemic, ICRA expects a sizeable increase in grants to the sector in the forthcoming budget. Higher allocation is also necessitated to enable the government achieve its target spend of 2.5% of GDP on healthcare by 2025, from the current sub 1.5% levels.

With the resurgence in Omicron cases, ICRA expects partial cost towards children’s vaccination and booster shots for the adult population to be a part of the upcoming budgetary allotment towards the sector.

To boost investments in the sector, tax incentives for private sector investments in modernising medical facilities and developing greenfield hospitals will be a welcome step. Further, considering the low doctors to people and nurses to people ratio (aggregate density of health workers is 23 per 10,000 population, which is significantly lower than that recommended by WHO), increased allocation towards training medical personnel, in addition to improving infrastructure in tier-2 and tier-3 cities, would be a favourable move.

Dr. Azad Moopen, Founder Chairman and Managing Director, Aster DM Healthcare 

The budget should incentivise the private sector to improve medical facilities in Tier 2 & 3 cities and rural areas to bridge the healthcare urban-rural divide.

While the last Union Budget saw 137% increase in healthcare spending which accounted for 1.8% of the GDP spends, it would help to increase the allocation to least 3% to ensure continuity of many of the initiatives. Technological innovations and government initiatives are transforming the healthcare industry in India.

The government should roll out programs to train new and up-skill the existing manpower to address the shortage of skilled manpower in the healthcare sector.

The government should also consider “zero-rating” of GST on healthcare services and the lowest rate of GST on drugs, medical devices, and health insurance premiums to improve affordability. Rationalizing the import duty on healthcare equipment is also required.

The government should provide tax incentives for investment in research & development for genetic research and genome mapping which can go a long way in supporting the National Digital Health Mission in early identification of genetic traits and intervention in the prevention of major NCDs.

Last but not the least, the government should increase budgetary allocation for the promotion of digital healthcare to improve access in rural and remote areas. This will not only reduce the burden on our limited healthcare facilities, but also the cost burden on the patients.

Dr. Gayatri Kamineni, COO, Kamineni Hospitals

The Government of India has undertaken in-depth structured and sustainable reforms to strengthen the healthcare sector and has also announced favorable policies to promote FDI. In the hospital segment, the expansion of private players to tier 2 and tier 3 cities beyond metropolitan cities offers attractive investment opportunities. The Covid-19 pandemic provided not only challenges but also many opportunities for India to grow.

India’s healthcare system has a demand-supply mismatch problem. About 65% of hospital beds in India are accessed by about 50% of the population concentrated in 7 states. The remaining 35% of the hospital population is used by the residual 50% of the country's population living in the remaining states. So clearly, there is a need to increase the number of hospital beds by at least 30% to ensure equal access to healthcare for citizens in all parts of the country.

Through the upcoming Budget, we hope to see that they would help greatly by introducing a cess on import of certain medical goods to help finance healthcare infrastructure and services.

The government could also set up Healthcare Infrastructure Medical Innovation Funds in addition to increasing the tax exemption on preventive health checks, and exempting healthcare services from Goods and Services Tax (GST).

There is an urgent need for the government to strengthen the governing bodies of medical education in the country, and to increase the number of medical and nursing colleges in the country, especially at the district levels, to meet the growing demand for health professionals.

Himesh Joshi, CEO & Co-Founder, Ayu Health Hospitals

As the country is gearing up for the third wave of the pandemic, the expectations are for greater budget allocation this year into the healthcare sector primarily for genetic research, aiding technology for early diagnosis in order to boost the capacity of our healthcare system to detect and cure new and emerging diseases in the aftermath of the Covid-19 pandemic. While the schemes like Ayushman Bharath were a step in the right direction, there is scope for amendments in the pricing structure where hospitals can provide high-quality healthcare services without incurring losses and also ease in the issues of delayed payouts to hospitals which are stretching into months for some schemes. The Government could bring in a model to incentivize the private healthcare sector to ramp up infrastructure that could benefit the public at large and set in motion for a strong healthcare system in the country. The government should also work towards ensuring adequate budget allocation towards various government schemes and ensure faster payouts to hospitals, which in turn will incentivize more hospitals to accept these plans.”

George Alex, COO &CMO, Jaslok Hospital & Research Centre

Covid has been an eye opener for our healthcare facilities for our population are grossly inadequate, we could see the chinks in the armour due to which some of our population suffered due to shortage of beds and has also cost precious lives. The government has ramped up infrastructure in some parts of the country to be prepared for any future requirement but it’s not enough and the private players have to ramp up infrastructure for which the government has to support the private players by offering tax concessions specially for import duties on medical equipment’s and devices for setting up allied departments and also to add beds and infrastructure.

Trained personnel’s like doctors, nurses and support staff are critical to activate the added capacity, there is a migration of nurses from India to other countries and hospitals have always seen shortage of such staff, the need of the hour is to set up more medical colleges and nursing colleges to meet the increasing demand as healthcare infrastructure is built in the near future. GoI skill development is an important tool which should be used to train and make the support staff work ready when the need arises. These colleges for medical workforce should be opened up across the country so as to easy access for the aspirants to join the courses.

Masina Hospitals, Dr Vispi Jokhi, CEO

The expectations from the union budget for the healthcare sector relating to an increase from 1.8 % in the outlay of the budget to at least 2.5% of the GDP this year. This has become an oft repeated demand. In view of the state of health care following the devastating effect of the Covid pandemic some concessions to the industry are in order. These relate to relaxation of norms for treating people from weaker section free of cost and at heavily subsidized cost. The 2% to be set aside for this purpose should be reduced. The cost of compliance relating to fire safety norms and other infrastructure norms need to be reduced by providing special pricing for equipment relating to the same for hospitals. Going forward a policy to deal with pandemics in the future must be formulated where a consultative approach on public-private partnerships is to be adopted. The budget must provide for universal health insurance with a reasonable pricing structure to enable charitable trust Hospital to participate in the same.”