Remedy Short of Malady?

Ravi gupta

Ravi-guptaFinance Minister Arun Jaitley’s maiden Union Budget does talk about sops to the healthcare sector, but going by the reaction from the Industry, they probably expected more off the rather ‘reformist budget’.


The Budget proposes an allocation of Rs 33,150 crore for the healthcare sector, apart from rolling out Atal Innovation Mission, an innovation promotion platform involving academics, entrepreneurs and researchers, at an estimated cost of Rs 150 crore. The government has also proposed to raise the limit of deduction in the health insurance premium from Rs 15,000 to Rs 25,000 and from Rs 20,000 to Rs 30,000 for senior citizens. The increase in health insurance premium will enable people to go for quality healthcare, which is a huge concern in the country.

Some of the other key announcements include a proposal to set up AIIMS in five states — Jammu & Kashmir, Punjab, Tamil Nadu, Himachal Pradesh and Assam. Bihar will also have a second institute modelled on AIIMS. Besides, three new National Institute of Pharmaceuticals Education and Research in Maharashtra, Rajasthan and Chhattisgarh, and one Institute of Science and Education Research to be set up in Nagaland and Orissa each. The move will go a long way in addressing the issue of shortage of doctors and skilled professionals.

While the increase in allocation for healthcare is a welcome move, Mr Jaitley could have done more. Even after the proposed hike in the government spends, it remains lowest amongst the BRIC nations. The funds may also fall short to achieve the ‘Healthcare for All’ goal by the end of the next five-year plan.


Also, the budget leaves the import-dependent MedTech industry, which could have given impetus to the ‘Make in India’ campaign, completely untouched. The healthcare sector was expecting announcement of tax holiday for medical technology companies desirous to set up new manufacturing facilities, and announcement to set up medical technology manufacturing hubs with singlewindow clearance to provide ease of manufacturing.

Similar is the story of the pharmaceutical industry, which looks disappointed with no major announcements coming its way. There is also a lack of announcement of initiatives to boost the bulk drugs industry, which is facing stiff competition from China.

As if that was not all, the increase in Service Tax rate to 14 percent from the 12.36 percent is also sure to have an adverse impact on patients and hospitals.

But as they say, reforms and stimulus don’t go together. Let’s accept the fact.

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