The Union Budget of 2024 is expected to be focused on key areas including affordability, accessibility, and quality within the Healthcare sector. Anxiously awaiting for the Budget day, the Indian healthcare industry has tremendous expectations on the upcoming Budget.
According to credible data, there has been a constant decrease in health expenditure with respect to both the budget and GDP from the time period of 2018-19 to 2023-24. Further, this decline becomes more significant when accounting for inflation. The expenditure has only marginally increased since the 2019-20 term period if we look at it from the real terms. Furthermore, the proportion of the total budget which is dedicated to health has declined from 2.4 percent in 2018-19 to a mere 1.9 percent in 2023-24. At the same time, the percentage of GDP allocated to health has also dropped from 0.30 percent to 0.28 percent during the same period.
Many stakeholders within the sector are asking for an increase in budget allocation for healthcare in the current fiscal year, wherein, an increase in the budget would have a significant impact on public health initiatives, infrastructure development, and resources dedicated to medical research. Adding to this, there is a prevailing anticipation of the introduction of tax incentives, which might involve tax relief for healthcare providers or insurance companies. This would be aimed at driving the much needed affordability within the healthcare system.
Dr. Harsh Mahajan, Chair at FICCI Health Services Committee stated that the government should fulfill its promise of allocating 2.5 percent of GDP to the healthcare sector.
Mahajan told news agency ANI, "We would want the government to fulfill its promise of spending 2.5 percent of GDP on the healthcare sector as was promised many years ago. One has to realize that the healthcare sector, apart from taking care of the health of the public, also provides many jobs. So, increasing the investment into healthcare by the government would lead to not only a healthier society but also help in achieving the target of becoming a five trillion economy."
“The Union Budget 2024-25 is a pivotal moment for India's healthcare sector. Building on the ₹64,180 crores allocated in 2023-24 under the Pradhan Mantri Atmanirbhar Swasth Bharat Yojana, we need enhanced tax incentives and financial support for healthcare startups to catalyze innovation. Significant investments in digital health infrastructure, particularly AI, will improve patient outcomes and operational efficiency,” says Dr Sravani Reddy G, Founder & CEO at Soprav Healthcare Consulting.
Joseph Pasangha, Group COO at SPARSH Hospital, Bengaluru noted, “The healthcare sector in India is on the brink of excellence. There is an increased focus on treating unique patient cases, robotic surgeries, and increasing prominence of AI for accurate diagnosis. To reach the next phase, emphasis must be laid on innovation, research & development, and infrastructure development. These are the foundations for India’s health sector to achieve an international standard of treatment for all.”
Anubha Taneja Mukherjee, Member Secretary at Thalassemia Patients Advocacy Group also highlighted, "As of now, only a few iron chelators, Deferoxamine and Deferiprone, for thalassemia patients currently fall under the 5 per cent GST slab. Even though we are incredibly grateful for a reduced GST slab on these drugs, the reduced GST slab is not considerably benefiting Thalassemia patients as there are other life-saving drugs and equipment that are needed lifelong by Thalassemia patients. These fall under a higher Goods and Services Tax slab of 12 per cent."
"The recent introduction of the new tax regime has taken away the relative advantage of additional tax relief provided under Section 80U for Persons with Disability (PwD), including Thalassemia, which incur exorbitant expenditure on their treatment and are at a disadvantage in society concerning opportunities. We wish to draw attention to the need for a GST reduction or waiver as appropriate on the below-mentioned life-saving drugs and equipment related to thalassemia treatment, such that the cost of treatment is kept at a minimum," she further added.
Alyve Health Calls for Budget Focus on Preventive Healthcare Initiatives to Ease Burden on Indian Healthcare System. Alyve Health is keenly awaiting the upcoming budget to be presented by Finance Minister Nirmala Sitharaman. “We urge the budget to prioritize the healthcare sector, specifically focusing on preventive healthcare initiatives. While the health budget has increased 12% to ₹86,175 crore in 2023-24, there is a significant disparity in healthcare services available in rural and urban India. Moreover, the rise in outpatient care costs, especially for lifestyle diseases such as diabetes, heart disease, and cancer, is straining the healthcare system. It makes a case for lifestyle management and preventive healthcare initiatives,” cited Shashank Avadhani, Co-founder & CEO, Alyve Health, India’s fastest growing health-tech platform.
