Over the last few years, the healthcare sector has received adequate attention in the Union Budgets. This year also, we anticipate that the Government will introduce measures to improve the quality of healthcare and make it more affordable.
The major expectation is for increased allocation of budget to the healthcare sector. Healthcare expenditure and investment should be increased to 2.5% from current spending of 1.25% of GDP.
More focused efforts are required to ensure India’s transition from an importer to an exporter in the Medical Devices Sector. The Govt. should consider increasing export incentives under RoDTEP to 2% from the existing 0.5%, to encourage exports from India and also help companies to become more competitive in global markets.
Government should allow extra depreciation of 15% on Capex investments above Rs 25 crores PA for next 3 years for existing companies to push new investments. This will not only reduce the tax burden for existing companies but also spur demand for capital goods. Currently only new companies are entitled to a reduced tax rate of 15%.
To boost R&D in the Medical Technology sector, the government should restore 200% weighted tax deduction against R & D expenses since it is critical for new technology development and innovation.
The Medical Devices and Equipment sector has 3 slab rates of GST – 5% , 12% and 18%. This should be harmonized to a uniform rate of 12%.
Product / Category specific Industrial Zones/ Parks with common infrastructure can give impetus to medical device manufacturing.
Although current attention is on Covid-19 pandemic, it is equally important to increase the proportion of expenditure on preventive healthcare and wellness. This will help ease the burden on existing healthcare infrastructure of non-communicable and lifestyle diseases.
There is a severe shortage of skilled manpower in the country. Extra funds must be allocated for skilling & up-skilling of clinicians, nurses, paramedical staff and other care providers. There is a need to set up new Medical Colleges &Nursing Schools, and incentivize them.
Hope healthcare finds its due for the deserved growth, in the upcoming budget.
Views expressed by Himanshu Baid, Chairman, NMTF, CII & Managing Director, Poly Medicure Ltd.