Healthcare experts have lauded the union budget and termed it as supportive as the Finance Minister has increased healthcare allocation in the country by 21.9 per cent. From excise duty reduction on medical equipment to service tax waiver in clinical trials and reduction in R&D consumables, the healthcare sector is satisfied with the union budget unlike many other sectors including pharma.
The government's intention is clear when it announced its efforts to achieve zero level disease through the National AIDS Control Programme and a major outlay for immunization. There are also measures for significant improvement in healthcare in rural areas and increased budget allocation of National Rural Health Mission from Rs 8207 crore to Rs 9947 crore, senior officials in Karnataka Directorate of Health and family Welfare said.
Vishal Bali, CEO, Wockhardt Hospitals Group, stated, "The overall thrust towards Healthcare delivery in the National Budget 2007-08 is marginal compared to the fundamental reforms that the healthcare delivery sector needs in India".
"The National Aids Programme and the immunization programs are definitely constructive measures towards disease prevention in the country. A 21.9 per cent increase in health expenditure and the increase from Rs.8207 cr to Rs. 9947 cr for the National Health Mission are positive steps and should help in reforming the primary healthcare system in the rural areas. The reduction in peak customs duty will help healthcare providers in importing advanced medical technology into the country, Bali added.
"What comes as the downside is that the Finance Minister has made no fundamental changes which will help in the faster growth of the healthcare delivery sector and thereby help the average Indian get access to better quality of healthcare. Industry's demand of it being given infrastructure status has been ignored once again. Although the FM has touched upon the much needed health insurance at the micro level for the textile sector, there has been no mention about reforms in the health insurance sector, which will fuel private sector participation and propel the reach of health insurance to the masses. The Finance Minister has acknowledged the successful Public Private Partnership (PPP) models in various sectors and could have looked at creating a PPP model in healthcare delivery for efficient and optimal utilization of the increased health expenditure and also give a fillip to new healthcare infrastructure in semi urban and rural regions. Customs duty exemption for life saving consumables has also been given a miss," said Bali.
As a country on path towards developed nation, India needs a chronic focus on healthcare delivery transformation. Budget 2007 has missed the opportunity to create that transformation in this evolving sector, stated Bali.
VP Kamat, chief executive officer, Apollo Hospitals, Bangalore stated that the positive side of the Union budget is the increased allocation on healthcare by 21.9 per cent and reduction of customs duty from 12.5 per cent to 7.5 percent besides removal of service tax on clinical trials. The area of concern which still remains is the non-inclusion of mandatory health insurance, though some mention of it is made for the unorganised sector like weavers etc".
R Basil, managing director and CEO, Manipal Health Systems said, UPA government's increased the allocation for health and family welfare by 21.9 per cent to Rs 15,291 crore reaffirms its commitment on increasing the spending on healthcare.
The reduction in import duty on medical equipment by 5 per cent, which now stands at 7.5 per cent, will lend tremendous benefits to high-end healthcare providers. Healthcare is capital intensive industry and equipments form a significant portion of costs. It will also enable hospitals to go in for replacements and technology up gradation. We would expect it to come down further in future in favour of the common man. For groups like Manipal, which has interests in research and development, the extension of the concessional rate of 5 per cent duty for public funded research institutions will come in as major boost. The exemption of service tax on clinical trials for new drugs will help our clinical trial initiatives attract more foreign and domestic partners," stated Basil.
Emphasis on mother and child care, integrated child development services, prevention and treatment of communicable diseases, bold measure announced to stabilize HIV/AIDS, Polio, and initiatives of Anganwadi centres and Associated Social Health Activists (ASHAs) will have significant impact on community health, particularly in rural areas.