India has been a lucrative medical equipment and devices market, and the year 2015 holds greater promises. The year-end announcement by the government, opening floodgates for FDI in the sector, is sure to see foreign investors making a beeline with their money bags, ready to partner with Indian manufacturers.
Valued at Rs. 37,800 crore in 2013, the Indian medical equipment and devices market is growing at an annual clip of 10-12 percent, though imports constitute nearly 80 percent of the market. However, with the government’s decision coming in, what one can look forward to is a boost to the domestic manufacturing activities, which will naturally lead to a decline in the import orders by as much as 60 percent. Indeed, the situation offers a bouquet of opportunities to both foreign as well as domestics manufacturers.
On the other hand, media reports suggest that the Ministry of Health is planning nearly 20 percent cut in the budget allocation for healthcare for the ongoing its 2014-15. The possible reduction in fund allocation is being attributed to fiscal strains. In absolute terms, the likely cut would be to the tune of about Rs. 6,000 crore has been slashed from their budget allocation of Rs. 30,000 crore for the financial year ending on March 31. At a time, when hopes have been pinned on Prime Minister Narendra Modi for making basic healthcare more affordable and accessible, it looks like rather ill-timed decision. But what people tend to lose sight of is the fact that a sizeable chunk of the healthcare funds have remained underutilised in the past three years.
If that is the case, one would ask, why not divert the fund for better utilisation in some other segment of healthcare? Well, that remains open to debate. However, what sounds logical is that the withdrawn money can be diverted towards raising skilled medical workforce, as data suggests that doctor-nurse density per 100,000 people stands at an appalling 19. Our skilled workforce is being lured away by developed countries through attractive compensation packages, so we are left with little choice but to multiply the numbers of trained professionals. That remains a necessity if the country is to achieve the goal of Healthcare for All.
Wish you a Happy and Prosperous New Year – 2015!