On February 1st, 2021, Finance Minister Nirmala Sitharaman announced a whopping 137% jump in healthcare expenditure, amounting to 2, 23,846 crores via the Union Budget Speech. 

Sitharaman spoke in detail outlining the government’s progress and priorities regarding coronavirus testing and treatment, huge investment and incentive opportunities in the private healthcare, advances in the Pharma sector and big sops aimed at providing a more secure health safety net during the prevalent crisis. 

The breakdown of the colossal healthcare allocation amount shows a holistic approach to boost the healthcare scenario at the primary, secondary and tertiary levels. This is slated to benefit all classes and strata of society. The three areas identified for healthcare spend are a) Preventive b) Curative, and c) Wellbeing.

This reassuring budget has provided significant impetus and boosted morale to the Indian healthcare and pharma industry. 

Health and Wellbeing – Expenditure (In crores)

Investment in Private Healthcare

The Budget proposals and strategies for the upcoming years are based on some well defined and vital tenets that will provide a step toward a stronger development for aspirational India. These include Health and Well-being, Financial outlay, infrastructure support, higher resource allocation in the medical ranks, Innovation and R&D. Almost all of these hold the potential to impact the Healthcare sector in some way or another. 

Private investment opportunities shine the brightest in this ‘get well soon’ budget. Caps have been lifted off foreign investment in the area of insurance. From a previous 49% FDI, now investment can be made upto 74% by foreign investors. An amendment to the Insurance Act, 1938 not only increases the FDI limit but also allows foreign ownership and control with needed safeguards. Under this revised structure, major Directors on boards and key management persons would be required to be resident Indians, with at least 50% of Directors being Independent Directors. Plus, a specified percentage of profits is to be retained as general reserve. 

Existing players will now be enabled to to increase their geographic footprint as well as offer new insurance products to customers. This increase also offers opportunities to new players who are seeking entry into the burgeoning Indian insurance sector. 

Atmanirbhar Swasth Bharat Yojana 

There was due importance given to the PM AtmaNirbhar Swasth Bharat Yojana, a new centrally sponsored scheme scheduled to launch soon. It would support the development and reform primary, secondary, and tertiary health care systems with around ₹64,180 crore over 6 years. The objective outlined is to strengthen current institutions and build new ones in order to test, detect and treat new and emerging diseases.

This scheme aims to support 17,788 rural and 11,024 urban Health and Wellness Centers, establish integrated public health labs in all districts, strengthen the National Centre for Disease Control (NCDC), its five regional branches and 20 metropolitan health surveillance units, establish nine Bio-Safety Level III laboratories and four regional National Institutes of Virology.

  1. Support for 17,788 rural and 11,024 urban Health and Wellness Centers 
  2. Setting up integrated public health labs in all districts and 3382 block public health units in 11 states
  3. Establishing critical care hospital blocks in 602 districts and 12 central institutions; 
  4. Strengthening of the National Centre for Disease Control (NCDC), its 5 regional branches and 20 metropolitan health surveillance units
  5. Expansion of the Integrated Health Information Portal to all States/UTs to connect all public health labs
  6. Operationalisation of 17 new Public Health Units and strengthening of 33 existing Public Health Units at Points of Entry, that is at 32 Airports, 11 Seaports and 7 land crossings
  7. Setting up of 15 Health Emergency Operation Centers and 2 mobile hospitals
  8. Setting up of a national institution for One Health, a Regional Research Platform for WHO South East Asia Region, 9 Biosafety Level III laboratories and 4 regional National Institutes for Virology.

Parallely, the Jan Aushadhi Kendra scheme will be expanded to all districts and 2,000 medicines and 300 surgicals will be offered by 2024. Viability gap funding window has been proposed for setting up hospitals in the public-private partnership mode.

A health cess will be levied (in addition to customs duty) on certain medical devices, such as X-ray machines, imported into India. This cess will be utilised for the financing of health infrastructure and services.  

We can also look forward to the launch of the Jal Jeevan Mission (Urban). This mission aims at universal water supply in 4,378 Urban Local Bodies housing 2.86 crores household tap connections. It also governs Liquid Waste Management in 500 AMRUT cities. This plan will be implemented over 5 years, with an outlay of 2,87,000 crores. The Finance Ministry has also devised an innovative National Infrastructure Pipeline (NIP) for 2020-25, which incorporates INR 1.69 lakh crores for infrastructure growth related and dedicated to healthcare. 

The National Commission for Allied Healthcare Professionals Bill in Parliament, with a view to ensure transparent and 25 efficient regulation of the 56 allied healthcare professions. Additionally, to bring about transparency, efficiency and governance reforms in the nursing profession, The National Nursing and Midwifery Commission Bill will be introduced by the government for passing.

Coronavirus Prevention and Treatment

It was a proud moment for our country when the FM announced India’s global efforts towards treating and eradicating the Coronavirus in more than 100 countries. Added to 2 confirmed vaccines in the market, the significant boost in COVID support expenses amounting to 13% of the nation’s GDP, was reiterated. It was further comforting to know that two or more vaccines are expected soon.

The pandemic has shown us that we cannot be over-dependent on solely testing and therapy. Primary and preventive care is vital for a solid and robust healthcare system. To ensure this, the FM announced that the tax exemption on Preventive Health check-up will be raised from the present Rs 5,000 per individual (Rs 7,000 for senior residents) to Rs 20,000 u/s 80-D of IT Act. This is towards encouraging preventive care by protecting citizens from unexpected healthcare spending and possibly, working towards building a Healthcare Savings Fund.

Hence, overall this budget offers tremendous potential to the healthcare to expand and improve on creating products and technologies which will benefit India in the long term. The industry needs to initiate business strategies and planning while taking into account the sops provided in this ambitious budget. The joint aim, of course, should be to build an environment that addresses the preventive health care needs of each Indian, anywhere in the country.

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