Budget 2021 needs to be a booster dose for healthcare : Experts


The healthcare industry is optimistic about the Union Budget FY 21-22. As COVID-19 has brought healthcare to the fore be as a priority and to invest in improving the country’s healthcare systems. Experts from healthcare industry opens a bag of expectations for Union Budget 2021-22 to Prathiba Raju of Elets News Network (ENN).


Unlike every other year, the healthcare sector is eagerly is awaiting for some positive news on the increasing public health expenditure, which remain unchanged for decades. The 15th Finance Commission has recommended that India’s combined public health expenditure should be raised to 2.5 per cent of the Gross Domestic Product (GDP) by 2023-24.

The upcoming Budget 2021 on 1st February 2021 might have a plan to create a fund under the “Pradhan Mantri” umbrella, and increase allocation to the healthcare sector. Both the Centre and states might need to contribute to the fund, which is likely to focus on long-term and short-term priorities of the healthcare sector, a news daily reported.

“According to the report, the 25 per cent of the fund might be spent on primary healthcare and the rest on infrastructure, research and development. It might also provide capital to the government’s current schemes like Ayushman Bharat,” it added.


A recent survey by Deloitte Touche Tohmatsu India LLP (DTTILLP), respondents with 180 survey participants, 68 per cent industry leaders are positive about India’s economic revival. Respondents believe that the mass vaccination drive, the government’s stimulus packages and other policy changes focused attention to infrastructure, and continuing efforts on digitisation are some key areas helping India revive and thrive.

Nearly 60 per cent of the survey respondents felt Atmanirbhar Bharat, the government’s flagship programme aimed at attaining “self-reliance”, is well received. Respondents also expressed that extending R&D incentives, increasing FDI limit in different sectors and further simplifying its processes, along with supply chain reforms, would further enhance the programme’s effectiveness. Respondents felt that increasing the credit support to MSMEs would help the industry rebound sooner.

Respondents felt that focusing on the infrastructure sector with timely and adequate financing, as outlined under the National Infrastructure Pipeline (NIP), should be a priority area in this budget. About 60 per cent of survey respondents cited that incentivising infrastructure investments will provide the desired impetus to the sector.

Sharing his views on the survey findings, Sanjay Kumar, Partner and Leader Public Policy, Deloitte India, said, “The financial year 2020-21 saw unprecedented disruptions to lives and livelihood all across the world. Recent data and business signals suggest that the economic recovery may be on the way. Schemes such as Aatmanirbhar Bharat have done especially well in supporting self-reliance and stabilising the country’s economic growth.”Dr_ravi_gaur

Informing that to handle the immediate needs of the COVID-19 pandemic (including vaccination) and to take the fight on, a significantly greater funds need to be allocated in the Budget 2021-22, Dr Ravi Gaur, MD Director & Chair Medical Advisory Committee, Oncquest laboratories limited, said, ” There is a strong need to focus on the larger picture like, improving medical infrastructure, increasing human resources, digitisation and AI. Greater tax benefits & incentives for preventive health checks, molecular technology-based assays for early and finer diagnosis (including prediction) of disease, local manufacturing, investment in rural areas, logistics and R& D will go a long way to help the health of healthcare. Startups, which can lead to disruptive innovations, targeted health care delivery should be encouraged with funding and adoption. We won’t be able to achieve all our aims in this one budget, but we need to start in that direction and commit to investing in healthcare over the next few years and make it a priority.”

Highlighting that past year has been tough for businesses and industry with numerous challenges resulting from the global lockdown, but the industry has performed relatively well, Nikhil Chopra, CEO & Whole Time Director, J.B. Chemicals & Pharmaceuticals said, “The budget should focus on proposals that revive demand and boost economic activity. A budget that leads to growth and revives industry, provides incentives for capacity creation, encourages investments, and creates jobs. A budget that increases spends on infrastructure development, which will have a ripple effect on the economy.”

Also read: NDHM: Beckoning quality universal healthcare in India

“To give the necessary fillip to the sector, we expect the Government to form enabling policies that will empower the industry to establish India as the pharmaceutical hub for the world. While the budget should continue to ensure wider implementation of schemes like Ayushman Bharat, as against the marginal increase in budget allocation for healthcare every year, the budget this year should put health on top priority and increase spends on public health substantially from previous years,” Chopra added.

Underlining that the GDP allocation to the sector should be at least two to three per cent more than what it is currently, Dr BS Ajaikumar, Chairman & CEO, HealthCare Global Enterprises Limited, said, “Health sector is in dire need of a skilled workforce, among other things. It is imperative to provide healthcare workers with continuous skill enhancement with specialized training for ailments like cancer. There is a need to bring in universal healthcare to bring health uniformity across the country.”AjaiKumar

“Incorporating health cess through mobile phones will help in directing to pool funds for the use of UHC. As the country and cancer burden is rising, the government could look at creating a specific corpus fund similar to the UK cancer drug fund so that cancer medication is available for both private and public hospitals. Every doctor from both the public as well as private hospitals should be a member of the National Cancer Grid (NCG). As a part of primary care, the government should frame guidelines as per age, for people to get screened for cancer. Early detection will help in bridging the gap in cancer care and bring down the costs. The screenings for the elderly population should be made mandatory,” Ajaikumar added.

Commenting that Union Budget 2021 is the most anticipated event for the healthcare sector, as the expectations from the budget this year is a lot higher and different, Dr GSK Velu, Chairman & Managing Director, Trivitron Healthcare Group, said,” As things stand currently, it is amply clear that the growth of the Indian economy is substantially dependent on healthcare and diagnostics. Given the fact, the pandemic has changed the dynamics of the healthcare industry. Allocation towards healthcare in India has been a challenge in the past and the current situation reiterates the need to increase public spending on healthcare. In such a situation, healthcare infrastructure should be prioritized so that production of indigenous healthcare equipment and medical technologies can increase.”Dr. GSK Velu

He added that the budget must be designed keeping in mind the requirements of the Atma-Nirbhar Bharat. The significant allocation must be reserved to boost indigenous manufacturing & research in healthcare. Also, provisions in the union budget must focus on incentivizing local manufacturing of medical devices to give an impetus to the ‘Make in India’ initiative.

“Further to this, budget 2021 can prepare feasibility gap funding (VGF) options to further attract private sector investors in tier II and III cities by focusing on Public-Private Partnership (PPP), and strengthening indigenous manufacturing of medical devices. India needs an efficient solution to meet the challenges of its healthcare sector, especially high public expenditure and therapeutic technology provides the most efficient solution for this. Therapeutic technology solutions will certainly help in creating a comprehensive and integrated healthcare ecosystem in the country and will help in providing patients, access to high-quality and cost-effective care. The budget needs to focus on the expansion of high-quality healthcare with the potential to make healthcare more affordable and accessible by using technology to reach the grassroots level,” Velu added.Dr Alok Roy -2

Giving his views, Dr Alok Roy, Chair, FICCI Health Services Committee and Chairman, Medica Group of Hospitals, said, “ It is crucial that the government provides appropriate fiscal incentives and creates sustainable public policy to encourage investment in private healthcare infrastructure. Hospitals should be included under the definition of ‘industrial undertaking’ u/s 72A of IT Act. This has been a long-standing demand, critical to expedite private investment in healthcare capacity building and to ensure that healthcare is treated at par with other sectors.”

H further recommended that tax exemption on preventive health check-up be raised from the current Rs 5,000 per person (Rs 7,000 for senior citizens) to Rs 20,000 u/s 80-D of IT Act. “This is an opportunity incentivising health-oriented consumer behaviour for insulating individuals from the effects of unanticipated healthcare spending and for institutionalising a healthcare savings fund,” he said.

Referring that the Finance Ministry has devised an inspiring INR 111 lakh crore National Infrastructure Pipeline (NIP) for 2020-25, which includes INR 1.69 lakh crores for infrastructure development projects for healthcare, Roy said, “There is a need to increase the proportion of health research allocation in overall health expenditure to at least six per cent of the funds allocated to the Ministry of Health and Family Welfare (MoHFW).”

Healthcare should be accorded ‘national priority’ status, as was done for the IT sector, to bring in requisite attention and investment. Innovative long-term financing structures, special healthcare zones, subsidized cost for land and electricity, higher FSI for hospital buildings are some of the measures needed for enhancing infrastructure creation in healthcare.

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