The Healthcare sector is one of the biggest priority areas in the post-pandemic era. People in the healthcare sector are keeping their fingers crossed, hoping to get various incentives and relaxation in the Union Budget 2022.
Taazakhabar News spoke to a number of people in the insurance, health, and diagnostics sector to gauge their expectations from Union Budget 2022-23 which is scheduled to be presented by Finance Minister Nirmala Sitharaman in the parliament on February 1. Expects:
Rakesh Jain, CEO, Reliance General Insurance
For the Union Budget 2022, the Government should consider bringing healthcare facilities, such as diagnostic centres, speciality hospitals, wellness facilities, under the “Infrastructure” category. This will bring in funding from large institutions, including insurance companies that seek and have the regulatory obligation of investments in “Infrastructure assets”. The insurance and healthcare sector need to evolve together to boost access to quality and affordable healthcare to the masses.
Anup Rau, MD & CEO, Future Generali India Insurance
The lessons learnt from the COVID-19 pandemic underline that capitalizing on health is no longer optional. Stable, equitable, thriving, and peaceful societies and economies are only possible when no one is left behind. This crisis has presented an opportunity to prioritize and bring forth structural changes that benefit the population. To further give a boost to health insurance and its deeper penetration in the country, I urge the government to consider the following:
GST Reduction from 18% to 5%: In the order of needs, protecting health is of utmost importance, and due to the looming pandemic, health insurance is more relevant than ever. Health insurance is an essential commodity and needs to be slotted in the 5% GST tax slab to make it more affordable to access quality healthcare. A significant reduction in the GST on all personal lines of products—from the existing 18% to 5% will encourage more people to buy health insurance. For senior citizens, it should be exempted.
Increasing the limit for Health Insurance under Section 80D: The increase in tax deduction limit in Section 80D of the Income Tax Act can further help in the penetration of health insurance. Under Section 80D, an individual can claim up to Rs. 25,000 deduction for self and family. This limit should be increased to Rs. 1,50,000. The rising medical costs and the increase in the incidence of critical illnesses make it an unmanageable expense for middle-income and lower-income groups. So, a higher tax deduction limit for health insurance plans is the need.
Small ticket insurance products: Given the under-penetration of insurance in India and the need to bring a wider gamut of the population under the safety net, small ticket size insurance products like micro-insurance, sachet products, etc. can be exempted from GST. This will provide added boost to these products by making them affordable thereby enabling the population to get exposed to low-cost insurance products and appreciate their value better.
Dr Shravan Subramanyam, Managing Director, Wipro GE Healthcare
The pandemic has significantly shifted the dynamics of the healthcare sector, bringing to the fore the impending need for developing the medical infrastructure in India for improved access and operations. Recognizing the gaps in the sector, the government has already launched several short-term and longer-term measures for the health system including the PLI scheme for boosting domestic manufacturing of medical devices under the Atmanirbhar Bharat initiative. The launch of the National Digital Health Mission (NDHM) and National Digital Health Blueprint (NDHB) also underlined the value that the government ascribes to digitisation in healthcare.
We firmly believe that an integrated, digital-first healthcare system will be pivotal to India’s overall healthcare industry in the forthcoming years to achieve a holistic care continuum and to ensure that quality, affordable, and personalised healthcare is accessible to all. However, to achieve this, we are looking forward to a larger emphasis from the government on R&D and innovation in healthcare tech, which will further provide impetus to the Make in India initiative. We are expecting the 2022-23 Union Budget to also focus on investments in digital tools to support patient care and hospital workflow. To provide a fillip to the MedTech sector in 2022, waiving off the duty & CESS, and releasing sectoral payment dues will free up the working capital for investments in the inventory of critical spare and lifesaving equipment.
Encouraging and supporting local manufacturing of healthcare equipment and devices will be critical in 2022 to achieve the target of increasing healthcare spending to 3% of the country’s GDP. Additionally, disruption in the global supply chain has now provided opportunities for large-scale manufacturing in India. We believe that continued focus on innovation and R&D, local manufacturing and digital technologies will enable India to become self-reliant.
As we aim to move towards Universal Healthcare Coverage, ecosystem collaboration for both public and private sectors will be essential. Supporting and utilizing public-private partnerships efficiently will help drive access to care for non-communicable diseases, including appropriate funds for women’s healthcare, oncology, and cardiovascular research and care. We hope the endeavour to enhance the competitiveness of the industry would remain on the economic agenda.
A Ganeshan, Group Vice Chairman, Neuberg Diagnostics
- Personal Income Tax reduction: There has been no increase in the personal income tax threshold for the last several years. The threshold limit has to be increased to Rs 5 lacs for less than 60 years, Rs 6 lacs for senior citizens and Rs 8 lacs for super senior citizens. Section 115 BAC has to be deleted.
- Increase medical insurance premium deduction: In view of the Covid pandemic, which is threatening to become endemic, the insurance companies have increased the premium quietly and in view of the above the insurance premium deduction has to be appropriately increased for all classes.
- Medical expenditure deduction: Currently, those who do not have a healthcare cover, are entitled to claim up to Rs 50,000 towards medical expenditure incurred. There are a number of people, who do not have a health cover, particularly, those above 60 years. This section of people has again dealt with a body blow due to the pandemic. In view of the above, this limit has to be increased substantially or at least up to Rs 1,00,000.
- Persons having Income above Rs 50 lacs – To furnish Assets / Liability statement: This requirement was introduced almost 7 to 8 years back. With income levels going up to salaried class, those having taxable income above Rs 50 lacs (salaried class) have gone up substantially. Again, the AL statement actually does not serve any major purpose. Hence, this requirement has to be done away with for at least salaried persons and the limit has to be increased Rs 1 crore for others.
- Penalty under section 270 A – 200% is very harsh. The definition of misreporting/wrong reporting can be interpreted in either way with the result, taxpayers who never had any intention to conceal are facing huge penalties. These high-pitched penalty assessments are likely to be litigated for long and the intent of this section might get diluted. The penalty cannot be more than 100% of tax sought to be evaded.
- MSME cash flow crisis: MSMEs are still facing difficulties as regards receivable payments and even Government departments (state as well as Central) are not respecting the MSME laws. In fact, the maximum defaulters are only public sector undertakings and government departments. The Government has to introduce stiffer penalties for defaulters so that the MSMEs get adequate protection from the cash flow crisis.
- GST reduction: GST has to be reduced significantly across all products and services, to spur consumer spending and petroleum products have to be brought under GST. Healthcare services have to be brought under the GST regime with a 1% levy so that they are able to avail the input credit available, which go to waste now, resulting in a higher cost of services. If this is done, the overall cost of healthcare services will actually come down benefitting a larger section of the people.
Also Read:
Budget 2022: what does the industry want # 2
Budget 2022: what does the industry want # 3
Dr Surendra k Chikara, Founder & CEO, Bione
India’s biotech sector got some attention in the 2021 union budget. The finance minister spoke about the need for preventive and curative health and there was a 137% hike in the government outlay on health and well-being. In the 2022 budget, we feel that the government should move positively to recognize the important role genetic testing including DTC Genetic testing can play in preventive healthcare.
We would highly welcome any measures to boost private-sector R&D in the biotechnology segment in the manner it rightly deserves. This will go a long way towards making quality preventive healthcare affordable.
Aman Puri, Founder, Steadfast Nutrition
India has the lowest public healthcare expenditure in the world. The health expenditure has only been between 1.2 to 1.8% of the GDP all these years as compared to the world average of 6%. Covid-19 has put the spotlight on this hitherto neglected sector. The second wave brought about a collapse of the healthcare sector in many parts of the country. The Omicron wave has shown us that the virus is constantly evolving and can still overwhelm the healthcare system. Hence, our expectation from this year’s budget would be to allocate more funds to healthcare in order to strengthen primary, secondary as well as tertiary healthcare, public health delivery, and research. Notwithstanding the pandemic, the government allocated only 1.8% of the GDP to health in last year’s budget. The National Health Policy 2017 had recommended this be increased to 2.5 to 3% of the GDP. Given the Covid-19 situation, the allocation should be up to 5% of the GDP in this year’s budget. There should also be increased budgetary allocation to the pharmaceuticals industry to remove its current dependence on China and other countries for imports of Active Pharmaceutical Ingredients. Lakh crores of investment are required and not the current amount of hundred crores.
Covid-19 has also highlighted the role of nutraceuticals- particularly immunity boosters- as the first line of defence against the disease. Vitamin D, fish oil, multivitamins, and zinc supplements have been prescribed by doctors to Covid patients and survivors. The government should give a further fillip to this industry in this year’s budget to make India ‘Atmanirbhar’ in the manufacturing of nutritional supplements and also an exporter to the world. Moreover, only 70% of India’s population takes less than half the daily recommended dietary allowance of micronutrients. To address the prevalent anaemia and micronutrient deficiency in the country, the government should announce public-private partnerships with the nutraceutical industry to revolutionise the Indian health and wellness market.
Dr Anish Desai MD., Founder & CEO, IntelliMed Healthcare Solutions
The healthcare sector continues to face the new challenges presented by the ongoing pandemic, which continues to dominate the attention and resources from all stakeholders. Neglect of rural population, the inadequate outlay for health, social inequality, shortage of medical personnel, and lack of medical research, expensive health service, and health insurance sector reforms. Lack of cheap finance for the healthcare delivery models are some of the major issues that have been ailing the Indian healthcare system.
To address some of the gaps, a 137% increase in healthcare expenditure was announced in Budget 2021. India spent around 1.8% of its GDP on healthcare. Increasing the healthcare expenditure above 2.5% of GDP and further going up to 4%, is one of the primary expectations from the Union Budget 2022. Widening the coverage and regulating the private insurance sector will be important to address a few of the issues. Making finance available at low-interest rates for hospitals and diagnostic chains & making it one of the priority infrastructures in the sector is critical. GST and import duties need to be minimal on life-saving drugs and devices.
Investments in R&D & medical research need to be encouraged and positive steps are needed in this direction, with financial allocation for the same. This will help to boost the domestic healthcare sector. International companies need to be encouraged to have R&D and manufacturing in India in collaboration with domestic players to enhance the capabilities of the local players and make state of art technology available to Indian patients.
Dr C.J. Vetrievel – Founder CMD, Be Well Hospitals, Chennai
The excellent leadership and dedication shown by the Central Government while handling the pandemic is commendable and must take inspiration from the same. With the country battling the third wave of Covid-19, there is a huge gap in the healthcare system that needs to be addressed by various healthcare service providers to form a network. An effective public-private partnership (PPP) model should be proposed to ensure cost-efficient operations are conducted. Additionally, the capital expenditure incurred on eligible healthcare projects in semi-urban and rural areas should be reduced for ventures with a minimum of 50 beds. This will help in reaching rural, semi-urban, peri-urban and suburban regions of the state by having a distributed healthcare delivery model rather than crowding in cities whilst providing quality healthcare services in the above-said regions. Considering the shortage of medical manpower in the country, a weighted deduction of expenses incurred on skill development in the healthcare sector must be offered.
Input credit on various services availed is currently very high resulting in a high cost of treatment which is borne by the patient. GST on a rental property is not eligible for input credit making it a cost for the hospital. Alternatively, hospitals should also be given the ability to claim the refund of input credits, similar to the benefits availed by Export Oriented Units and Special Economic Zones. This will help in reducing the cost of rendering services to patients.
The Healthcare sector needs to be considered as a priority and an essential service. Loans for working capital should also be provided to new borrowers under the Emergency Credit Line Guarantee Scheme (ECLGS). These are some considerations that we are requesting from the Government in the upcoming Union Budget 2022.
G. Srinivasan, CEO, Athulya
The changing dynamics of the healthcare industry post the outbreak of Covid-19 has elucidated the need for enhancing the skills of existing healthcare workers to facilitate better service. Hence, initiatives to motivate youngsters to take up a career in the healthcare industry and to include continuous development programs in their curriculum to enhance their skills will address the current demand for healthcare professionals.
To help our senior citizens meet the rising cost of medical treatments we would request to increase the health insurance age limit for senior citizens and to include provisions to increase the coverage, irrespective of existing medical illnesses.
To increase the support and guidance given to start-ups, in the form of incentives towards building and developing healthcare technologies that would aid in early detection, monitoring, screening and diagnosis of health ailments. This will reduce our dependence on international companies for the same.
We would also expect the government to considerately reduce the taxes imposed on medical equipment that are very essential, which will result in bringing down the overall medical expenses for an individual with ailments and comorbidities. Eventually, help our senior citizen community to fight the potential escalations in their medical bills.
And finally, to increase the tax benefits against their medical expenses and to revise the existing deduction for senior citizens as the cost of living has increased.
Dr Alok Khullar, CEO, Gleneagles Global Health City, Chennai
The outbreak of Covid-19 has taught the healthcare sector some important lessons. The healthcare sector has and will continue to play a crucial role in saving lives, treating other ailments while tackling the pandemic. With the disruption caused to the healthcare sector during this period, we urge the government to give adequate importance to the healthcare sector in the upcoming Union Budget 2022 by considering –
- Special schemes that should be provided for formal training of doctors and nurses to enhance skills and bandwidth to offer care to a larger population will help strengthen the quality of healthcare resources in the longer run
- Building capacity for Intensive Care by enhancing the skills of nurses and by providing better equipment and infrastructure
- Significance to be given to Appropriate Screening for Non-Communicable Diseases to ensure timely diagnosis and treatment which will help in the reduction of hospitalisation in the last minute
- Upgrading infrastructure at Primary Health Care level for early Outpatient treatment thus reducing Hospitalization time and cost
- Benefits to be given to manufacturers of Healthcare equipment & consumables under the ‘Make in India’ campaign for high-quality products and healthcare equipment to be manufactured at reasonable costs
- Healthcare organisations must be given access to working capital and preferential funding to ensure that the overall cost of operations is reduced
The Healthcare sector needs to be considered as a priority and an essential service. Various subsidies and benefits should be given on land rates and other necessities such as electricity, as it will pave for accessible and affordable healthcare with better infrastructure and high-quality treatment improving access to care and better patient outcomes.
Gandharv Roy, COO, Medica Superspecialty Hospital
A nation needs a healthy population to prosper. The obliteration of nearly 5 lakhs in less than two years owing to pandemic has brought the healthcare sector to the forefront in terms of making healthcare for all. The last two years have surely been an eye-opener for healthcare professionals globally, concerning the overnight revamping of the existing healthcare system. Budget 2022-23 is expected to address the ground realities of healthcare and the key components that we are looking forward to including research & innovation, digitization, public-private partnerships, tax reforms and research.
Budget 2022-23 needs to address the low per capita spend ($3) on indigenous medical devices since there is a significant dearth in indigenous manufacturing, and imports constitute over a significant percentage of the high-end medical device market. India is a fertile ground for MedTech innovation, and the industry yearns for single-window clearances for startups to thrive in the ecosystem. If the government could set up a system to facilitate early validation of MedTech devices and services, it could exponentially accelerate the development and deployment of various technologies in healthcare. A tax break for 10 years for setting up facilities in upcoming economic zones, MedTech Parks & MedTech Manufacturing facilities is one of the primary needs.
Government should also look at an increase in customs duty of finished medical equipment/devices and subsequent reduction in customs duty for components and SKD imports to promote ‘Make in India’. Reintroducing tax holidays for rural hospitals with the flexibility to select beneficial years and viability gap funding by the government will incentivize private healthcare infrastructure creation in Tier 3 & 4 towns. GST must be reduced significantly across all products and services, to spur consumer spending.
We expect the government to look at increasing the healthcare expenditure above 2.5 per cent of the GDP. We are expecting an announcement of a 10-12 % rise in healthcare expenditure which will enable the much-needed attention that healthcare requires now.
Healthcare services must be brought under the GST regime with a 1% levy so that they can avail of the input credit available. If this is done, the overall cost of healthcare services will come down benefitting a larger section of the people. The government needs to bring more life-saving drugs at the lowest rate of GST, “zero-rating” of GST for health care services, this will help achieve the twin objectives of keeping the credit chain intact and will ensure that the tax is not loaded on to the cost of healthcare services making way for more affordable healthcare.
The ongoing pandemic has necessitated an immediate need for the integration of technology into the healthcare sector. Merging existing technologies and systems and evolving them to match future exigencies is the need of the hour. The focus on innovation and cutting-edge digital health innovations is of supreme importance like never before. Such synergies shall build up faster service delivery, rapid scalability of diagnostics, teleconsultations and telemedicine for all.
Intellectual capital must be retained & sustained. Considering the shortage of medical manpower in the country emphasis must be on skill development to achieve the aim of WHO-recommended doctor-patient ratio of 1:1000 by 2024. And should that not be possible, the country must build a solid line of paramedics who can deliver the care most required, on the ground, at the right time
