The captains of the healthcare sector have overall hailed the Union budget for the year 2015-16 presented by Union finance minister Arun Jaitley on February 28 in Parliament.
“Indeed a breath taking effort by finance minister Arun Jaitley. It envelops every section of society and commits to initiate social security network for all. There are measures for global competitiveness and "Make in India' - a reality,” commented Dr. Habil Khorakiwala, chairman, Wockhardt Ltd.
“Overall, it’s a positive and balanced Budget. Increase in infrastructure investments, roll out of GST next year, single window in regulatory processes and phased reduction in corporate tax are steps in the right direction” opined Sanjay Murdeshwar, managing director, AstraZeneca Pharma India Ltd.
Even though there is no direct impetus to the pharmaceutical industry, plans announced for the healthcare sector are welcome. Setting up of five new AIIMS across the country will help patients and medical education. Three more National Institute of Pharmaceuticals Education and Research will play an important role in bridging the skill gap, the National Skills Mission is an excellent endeavor in this area. Improving accessibility to healthcare has been stimulated through raise in health insurance premium from Rs.15,000 to Rs.25,000. Rs.150 crore announced for scientific research is a positive move, though incentivizing medical/pharma research would have helped trigger more R&D investments into the sector, Murdeshwar added.
Commenting on the budget, Anupam Verma, president, Wockhardt Hospitals said that the allocation of more money to states would enable the deployment of resources for healthcare on ground, healthcare being a state subject. On infrastructure front , its a bit of under expectation, with only mention of 5 AIIMS in various states. A centralized thrust on creation of more quality infrastructure on medical, paramedical, medical and allied education would have set clear directions. Also, the need for healthcare policy and an indicative allocation to roll that out with clear milestones would have been appreciated.
“Overall, this can be looked at as one of the most progressive budget for healthcare of the country, as the effort has been to enable the consumer to afford more and better healthcare . Historically there have been gaps in intentions and outcomes. We hope that this is bridged to create a healthy India this time”, Verma said.
Suneeta Reddy, managing director, Apollo Hospitals Enterprise Limited said, “Overall this has been a forward-looking and stable budget. By linking financial inclusion (Jan Dhan Yojna), social security and health insurance agendas, the Finance Minister has provided a holistic road map for greater access for all in the future. Specifically, the health exemptions provided for all and, in particular, for the elderly are a major positive. The government has announced 5 new AIIMS, which will both increase access to health facilities in those stated and also provide a training ground for medical professionals. The visa on arrival for 150 additional countries is also a progressive move. This will go a long way in facilitating medical tourism, which is a growth industry that showcases India’s world class health facilities while contributing foreign exchange to the exchequer. A lot more, however, needs to be done in terms of providing physical and educational infrastructure that supports the healthcare sector. This has to be done in partnership with and by giving incentives to the private sector that has been providing nearly 70% of the additional beds in India. We also welcome the road map for reduced corporate taxes starting in 2016 and the roll out of the GST, which is on track.”
"While the budget has addressed several macro issues and given focus on health sector by providing disposable income in the public's hand for healthcare expenses, nothing has been done for the heavily import dependent medical devices industry which is the fourth pillar of Healthcare sector like medical education, health delivery and pharmaceuticals industry. The medical devices industry imports over 27,000 crs of medical devices and nothing specific has been done to push up the Prime Minister's Make in India initiative in this industry”, said Dr GSK Velu, founder and managing director of Trivitron Group of Companies, India’s largest medical technology company.
Like the defence sector medical devices sector needs specific focus and Finance Ministry did not even attempt to eliminate the Inverse Duty structure in this industry making it more import dependent now. There are no specific announcements on innovation and R&D for this sector and if this trend continues we will be importing more than Rs.50,000 crores of medical devices in the next three to four years time. While our Honourable Prime Minister himself talked about the need for Make in India programme for medical devices industry there is nothing in this budget which facilitates this for domestic industry in both SME and emerging corporate segments, Dr Velu further said.
N Venkat, co-founder & CEO, Vyome Biosciences, said that overall the budget is directionally positive for facilitation of growth, inflation control and upliftment of rural and poor section of population. There is not much and specific industry concessions to life sciences sector. Increase in service tax and excise will have some short term impact on prices. Reduction of withholding tax on technology royalties will do good in free access of global technologies.
Somshubhro Pal Choudhury, managing director, Analog Devices India commented, “The 2015 budget is well balanced and sustainable with a prudent mix of fiscal discipline and much needed investment across key sectors like infrastructure along with a well thought out safety net for the poor under a financial inclusive agenda”.
“We welcome the government’s move of increasing health insurance cover, this will enable people to seek out for quality healthcare which is a huge concern in our country. The announcement of opening up of AIIMS in 5 new states will begin to address the huge shortage of doctors and skilled staff. However the allocation of Rs.33,150 crore towards the healthcare sector comes as a disappointment as the government has not kept up with its promise of increasing expenditure on public health,” said Dr. Ajay Bakshi, CEO & MD of Manipal Health Enterprise.
Dr Rana Mehta, Leader- Healthcare, PwC India, said, “Health insurance as an alternative to ESI contribution will promote choice for workers and encourage competition. Health insurance premium enhancement is in line with rise in premiums. Will help the growth of the health insurance sector and enhance coverage.”
Nilaya Varma, head of Government services, KPMG in India, said, “Although possibly controversial and against economist expectation, the pushing out of meeting fiscal deficit target by a year shows pragmatism in bringing in additional public investments for infrastructure development, compensating lack of private investment and showing seriousness on improving overall infrastructure”