June 22, 2024
Investment

Interim Budget: Healthcare industry expectations include incentives to promote private investment, R&D, et al


The healthcare industry is seeking greater incentives to promote private investment, sustained incentives for research and development particularly in antibiotic research, while calling for actions to address escalating Active Pharmaceutical Ingredient cost, including incentives for domestic manufacturers and a reduction in GST in the upcoming Interim Budget 2024-25.

Besides this the industry is also demanding accelerated growth in adding to the existing bed strength in the country so as to reach close to the World Health Organization’s mark of 3.5 beds per 1,000 population and provide accessible, affordable, and quality controlled healthcare which will be able to deliver effective universal health coverage.


Also read: Interim Budget may see measures to boost consumption demand, push agri economy

Speaking about the expectation from the upcoming budget Dr Girdhar Gyani, founder director, Association of Healthcare Providers said that while there is need for bigger allocation for promotive and preventive health initiatives we also need to build allied health sectors like pharmaceuticals and medical equipment/ devices. 

“Most of medical diagnostic equipment is imported. We need aggressive push through incentives to bring more technology partners to invest in this sector through joint ventures and home-grown research,” he said.

Saransh Chaudhary, president of Global Critical Care at Venus Remedies Ltd, recommended the inclusion of measures related to drug pricing and the exploration of innovative economic models, such as market entry rewards and delinked subscription models, to incentivise antibiotic research within the pharmaceutical sector. 

Budget should prioritise elevating research and development infrastructure, implementing tax rationalisation, and preparing for a $50 billion MedTech economy Abhishek Kapoor, CEO, Regency Hospital, said. He added that to address the escalating burden of non-communicable diseases, the government should look at implementation of comprehensive screening and diagnostics programs, coupled with the expansion of skilling courses for health professionals. 

The industry is also seeking increased budget allocation and notes that they expect further GST rationalisation for the availability of input credit. 

Said Probal Ghosal, executive chairman, Ujala Cygnus Group of Hospitals: “One of the most important features of GST is to boost the competitiveness of businesses by ensuring the free flow of input tax credits across the value chain. But we also expect further GST rationalisation. We also expect the budget to touch on certain key aspects like enhancing healthcare infrastructure in Tier two and three cities by granting it infrastructure status for private sector investment and ensuring low-cost funding and tax benefits.” 

Experts add that they advocate a comprehensive approach, addressing infrastructure, manpower, patient support, and digitalization for a resilient and accessible healthcare system. 

Chandra Ganjoo, group CEO, Trivitron Healthcare, in his statement about budget expectation said that the MedTech industry in India holds high expectations. With an alarming 80-85% dependence on imports, resulting in a massive import bill of over ₹ 63,200 crore, it’s crucial for the government to catalyse domestic manufacturing. This not only reduces the financial strain but also propels India towards self-reliance in medical technology, he noted. 

Meanwhile, the Association of Indian Medical Device Industry in its pre-Budget recommendations, has urged the Centre to address the soaring import bill, which currently stands at over ₹63,200 crore. 

In a letter to the Finance Minister Nirmala Sitharaman, it has requested to help curb the over 80% import dependence.

“It’s disheartening to note that imports are still on an increasing uptrend of over 21% over the last 12 months at ₹61,000 Crore compared to ₹50,000 Crore in the same period of preceding 12 months. Policy makers need to review the steep 33% increase in imports from the USA (the dominant exporting country to India) of ₹10,858 Crore over ₹8,186 Crore in 2021-22, Germany up at ₹6,188 Crore from ₹4,855 Crore in 2022, by a steep 27%. Imports from the Netherlands also increased by 20% to ₹3,552 crore in 2022-23 from ₹2,956 crore in 2021-22, whereas imports from China increased by 11% at ₹10,384 crore in 2022-23 from ₹9,374 crore in 2021-22 and Singapore by 15% from ₹4,800 crore to ₹5,520 crore,” the group said in its communication. 

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