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Budget 2019: A Pathway Towards A Healthier Nation

India will slowly yet steadily progress towards universal health insurance coverage, access to quality healthcare and digital first economy

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The Interim Budget 2019 is certainly growth oriented and in line with the broader vision set out by the Government of a Healthy and Digitally advanced nation. The focus of the budget, if looked at holistically, has largely been on uplifting the middle class, the agrarian sector and the unorganized segment. What has been particularly lauded is the announcement to raise individual income tax slab limit from ₹2.5 lakh to ₹5 lakh, and to raise standard deduction for salaried employees to ₹50,000, offering much respite to around 30 million middle-class taxpayers. Also, measures like increase in TDS margin for home rent and greater Capital Gains tax exemptions under Section 54, are expected to empower the middle class and uplift consumer morale.

Initiatives for uplifting the unorganized sector   

The Interim Budget has been favorable towards the farmers as the Government has promised income support to approx. 12 crore small and marginal farmers through increased interest subvention scheme, and Pradhan Mantri Kisan Samman Nidhi scheme. While the unorganized segment has received impetus through initiatives like higher fund allocation for construction of roads under the Gram Sadak Yojana, and social security coverage for workers in this segment. These are much welcomed moves, and will go a long way in bolstering the Indian economy. 

Ayushman Bharat – all the way 

On the healthcare front, the government’s announcement of including ‘Healthy India’ as part of its Vision 2030 reiterates its intent to streamline the largely distraught healthcare environment of the nation. A year back the government of India announced one of the most ambitious health offerings that the nation has seen so far – Ayushman Bharat, the world’s largest universal healthcare scheme, aimed at increasing health insurance penetration, as well as encouraging preventive healthcare among the people. The nation waited to see how the government stirred this ambitious project. A year later, we have seen almost six lakh people availing the services through 16,157 hospitals.

Thus, Ayushman Bharat remained the healthcare focus of Budget 2019 and received a boost in terms of fund allocation which now stands at more than thrice of that of last year’s at ₹6,400 crore for 2019-2020. The government emphasized on the Health and Wellness Centres (HWCs) and Pradhan Mantri Jan Arogya Yojna (PMJAY), the world’s largest social health scheme, which is expected to provide coverage to nearly 50 crore people. In a country of 1.3 billion people, the country’s out of pocket expense on healthcare is an alarming 62%. Hence, the government’s focus on healthcare and providing necessary medical support and health insurance to deprived rural families comes as a much needed respite. 

On the flip side though, the Interim budget is being criticized for low allocation of budgets to upgrade sub-centres to health and wellness centres (HWC) under the National Health Mission (NHM). An increase of just Rs 1,062 crore for 2019-20, which does not even cover the prevailing inflation rate. Capital expenditure to build infrastructure and acquire equipment has also been reduced by 43%. It now remains to be seen how equilibrium in the healthcare landscape is brought in.

Steps towards a digital-first economy

An aspect that saw visible uplift in the Budget is the ‘Digital India’ ambit. The government’s forethought on the digital progression and the ensuing moves declared, are heartening to say the least. It is no news that we are headed towards a future driven by Artificial Intelligence (AI). Hence the government’s announcement of setting up of the National Centre for Artificial Intelligence shows the futuristic vision that it nurtures. In addition, the introduction of National AI portal and the establishment of Centres of Excellence, are crucial initiatives in the Digitization journey. The budget also announced support to digital start-ups, fostering an environment of digital entrepreneurship. All of these moves are expected to drive India towards a digitally empowered future. 

From the perspective of health insurance, the digital enterprises are vastly encouraging and essential. The AI emphasis has the potential to revolutionize the Healthcare technology space. From underwriting to personalizing products, from claims management to streamlining processes, AI has the power to innovate and improve every area of the health insurance landscape. Also, the digital budget allocation to ₹3,073 crore which is double the amount allocated in 2018-19, is likely to increase the penetration of broadband and mobile connectivity. In addition, the proposal to set up 5 lakh Wi-Fi hotspots to provide broadband access to 5 crore rural citizens, is reassuring for the health insurance industry. This will undoubtedly lead to greater awareness of health insurance, preventive healthcare measures, facilities available for the rural masses by the Government, and nurture an environment of rural inclusion. 

Reduced or No GST on health insurance premium

The policy of reduced/No GST on health insurance premium that the industry has been vying for, did not come through in the current budget. This would have significantly increased penetration of health insurance in the country. 

On the whole, Budget 2019 was a beneficial narrative which echoed the government’s intent in building a stronger and healthier nation. In light of these transformational measures, we can expect that India will slowly yet steadily progress towards universal health insurance coverage, access to quality healthcare and digital first economy.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Union budget 2019

Ashish Mehrotra

The author is Managing Director & Chief Executive Officer, Max Bupa Health Insurance

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