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Focus On Wellness And Prevention

On the whole, the budget, while not specifically providing an increased allocation to healthcare delivery, has focused on prevention and wellness which can bear good results in the long term.

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the healthcare sector had many expectations from the Budget especially as there was no mention of it in last year’s budget. While the sector did find mention and the FM especially called out the government’s focus on a healthy and fit India, the specific announcements were not significantly impactful.  

India spends only 1.2 per cent of GDP on healthcare and the expectation has been that it will move closer to the promised 2 .5 per cent. The allocation for healthcare this year is Rs 69000 crore (including AYUSH), just a 3.8 per cent increase over last year. There has been no increase this year for PMJAY (Prime Ministers Jan Arogya Yojana), the flagship insurance scheme that proposes to cover 500 million beneficiaries. 

Let us look at some of the specific announcements. In the backdrop of the Ayushman Bharat Scheme, there has been a demand to incentivise the creation of health infrastructure in tier 2-3 towns. With this in mind, the budget announced that the government would provide viability gap funding for hospitals that would be set up in PPP mode in districts where there are no hospitals empanelled under the PMJAY scheme. The 112 districts identified as aspirational districts will be prioritised for this. The fine print, however, specifies that this will be funded by imposing a health cess on duty on imported medical equipment. This initiative will depend on whether successful PPP models emerge and the amount of funding made available by the cess. 

The other important announcement was the intent to expand the Jan Aushadi Kendra Schemes to all districts by 2024 and providing 2,000 medicines and 200 surgical at affordable rates. 

The Jan Aushadi Kendras, however, has been struggling with poor availability of several medicines and other systemic issues and it is imperative that the processes be streamlined so that they can truly benefit the users.

In order to encourage domestic production of medical equipment under Make in India, this budget has proposed a health cess on imported medical equipment. This cess will be used for funding health infrastructure. This measure will in the short-term increase the price of medical devices and therefore cost of treatment, albeit marginally, since at present about 70 per cent of medical equipment and devices are imported.  We need positive incentives including part funding of capital expenditure,  a robust ecosystem encouraging R&D and an excellent quality certification and compliance mechanism if we are to boost domestic production and substitute imports.  

The announcement regarding increasing seats in medium and large hospitals for PG fellow and diploma of National Board of Education - FNB/DNB for resident doctors is timely and will help overcome the huge shortage of specialists. 

The FM announced that the national flagship immunisation programme Mission Indradhanush will be expanded to include 12 additional diseases and five new vaccines. This is expected to improve our Maternal Mortality Ratio (MMR) and Infant Mortality Rate (IMR).  

Other encouraging announcements include use of artificial intelligence and machine learning to help screen and detect non-communicable diseases under the Fit India programme as well as looking at health holistically and focusing on other determinants of health like safe drinking water, sanitation and nutrition. Increased allocation towards Swacch Bharat, Jal Jeevan Mission and nutrition are likely to positively impact the health of Indian citizens and thereby also lead to a reduction of the need for curative treatments. 

On the whole, the budget, while not specifically providing an increased allocation to healthcare delivery, has focused on prevention and wellness which can bear good results in the long term.  

It is imperative however that we use the budgets and infrastructure we have available with efficiency and equity. 

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.

Tags assigned to this article:
Union Budget 2020 Union Budget 2020-21

Charu Sehgal

The author is Partner, Deloitte India

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