Obamacare may have split opinion in the US right down the middle leading to the insurance programme being abandoned by US President Donald Trump.

But with health barely featuring in election campaigns in India, the expectations from Budget also remain pretty low.

A key ask on health is that government delivers on its long-pending promise of increasing healthcare spending from about one per cent of GDP to 2.5 per cent or more. That apart, representatives with the pharmaceuticals, hospitals and medical device arms of healthcare are hopeful that the Budget give a direction in terms of incentivising industry to invest in developing and making more products in India.

Muralidharan Nair, Partner (Health) with consulting firm EY India, points out that a push by the government to the start-up ecosystem will translate into healthcare-oriented research too. And this would contribute towards making more affordable and accessible healthcare products and services, especially in rural parts of the country.

Apart from the broad allocations to health missions, sops are needed for hospitals and similar infrastructure in smaller cities, observes Nair. Primary care is a challenge and the government needs to explore how this can be supported. A special purpose vehicle that could govern primary health centres or help set up integrated health centres with a doctor, diagnostic lab etc, could be an option, he suggests.

In the pharmaceutical segment, if there was a time to support the industry to step up its game in terms of research and innovation, it is now, says Nair. The industry has in the past asked for tax incentives on its research and patent filings in India and overseas. Smaller drug companies trying to keep their head above water are looking for monetary support to keep pace with the quality demands on their manufacturing, processes and products.

The government has also been talking about reducing the industry’s dependence on China for bulk drugs and active pharmaceutical ingredients used in making the finished form of medicine. Industry will be looking for direction on this from the Budget. The measures that the government outlines for innovation and local manufacturing will feed the medical devices sector that has been opened up for 100 per cent foreign direct investment.

High import duties on medical devices is a contentious issue and gets different responses from the industry. “For products where the ability to import substitute is still far away, the high custom duties should be rolled back. Such custom duty increases, which are almost fully passed on to patients, will only tax the patients further due to increase in cost of treatment,” says Pavan Choudary, Director General, Medical Technology Association of India.

But Rajiv Nath with the Association of Indian Medical Device Industry, says, “Higher import duty on critical devices which can be made in India is not protectionism but sound economics and the preferred policy tool the world over to boost domestic industry and employment! Let us not shy away from this – this Budget.”

On the hospital front, PM Bhujang, President, Association of Hospitals, urges government to encourage the setting up of more hospitals. Among other things, the government must keep services rendered to a hospital away from the ambit of service tax, he says.

“The exemption on service tax on the inputs will reduce the cost to the hospitals and consequently cost of medical services to a patient. Moreover, VAT on medicines, implants and consumables used for patients in the hospital in the course of his/her treatment should not be applicable since those are obviously not sold separately.”

Many healthcare workers are hopeful that the government addresses common lifestyle-related health ailments, diabetes etc in some form to encourage people to focus on prevention. Hinduja Hospital’s Chief Executive Gautam Khanna suggests that the government make health insurance coverage mandatory.

This news was originally published in The Hindu Business Line

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