Union Budget 2024: Healthcare Industry Calls for Investment in R&D, Technology, Healthcare Infrastructure Enhancement & Patient Safety Measures

As the nation eagerly awaits the announcement of the Interim Budget 2024 on February 1, the healthcare industry has heightened expectations, anticipating pivotal decisions that could shape the future of the sector. With the general elections looming on the horizon, the budget is expected to strike a delicate balance between fiscal prudence and populist measures. In this article, we explore the pre-budget expectations of key players in the Indian health tech industry and the recommendations they have put forth.

Medical Devices Industry Seeks Reduced Import Dependence

The Indian Medical Device Industry, represented by the Association of Indian Medical Device Industry (AiMeD), has sent a letter to the Finance Minister, Nirmala Sitharaman urging the government to address the issue of over 80% import dependence.

In view of that, Rajiv Nath, the forum coordinator of AiMeD, expressed concern over the increasing trend of imports, stating, "It's disheartening to note that imports are still on an increasing uptrend of over 21% over the last 12 months at INR 61,000 Cr compared to INR 50,000 Cr in the same period of preceding 12 months."

AiMeD has put forth the following budget recommendations to curb import dependence:

1. Increase in Custom Duty: AiMeD recommends an increase in customs duty to a nominal 10%-15% to promote domestic manufacturing and reduce reliance on imports.

2. Correction of Inverted Duty: A proposal to levy a Health Cess of 5% customs duty on balance medical devices to correct the inverted duty structure. The generated cess would be used for the Ayushman Bharat initiative.

3. Trade Margin Capping: AiMeD suggests monitoring the Maximum Retail Prices (MRP) of imports and implementing trade margin capping if the MRP exceeds 10-20 times the Cost, Insurance, and Freight (CIF) value.

4. Income Tax Benefits: The proposal includes income tax benefits for project investments in medical device manufacturing, aiming to incentivise domestic production.

Self-Reliance & Growth in Diagnostics

Gaurav Srivastava, cofounder & COO, HaystackAnalytics, highlighted the ambitious goals of India's diagnostics sector, emphasising growth through geographical expansions, acquisitions, and technological advancements. He underlines the significance of the upcoming Union Budget in directing investments towards crucial areas such as innovation, R&D, technology, healthcare infrastructure enhancement, and patient safety measures.

Emphasising the industry’s call for self-reliance, Srivastava said, "Now is the opportune moment to address the supply chain issues through a strategic emphasis on local innovations and encourage manufacturing in India by embracing the 'Make in India' initiative." He further noted the need to make the diagnostic sector self-reliant, promoting confidence and perseverance in the fundamentals of recovery.

Talking about the evolving healthcare scenario, Srivastava highlighted the crucial role of genomic diagnostics. By giving due importance to genomics, he believes that India can enhance its understanding of diseases, paving the way for more targeted and personalised healthcare solutions. This, combined with the proposed budget initiatives, can construct a robust healthcare framework to address diverse healthcare challenges effectively.

Call for Forward-Looking Approach

Dr Harshit Jain, founder & global CEO, Doceree, acknowledges the Government of India's significant steps to revamp healthcare infrastructure, particularly the emphasis on digital health records under the Ayushman Bharat Digital Health Mission. He anticipates the government's continued commitment to the initiative and calls for a heightened focus on robust implementation in the upcoming fiscal year.

Adding the need for a forward-looking approach, he stated, "We expect a forward-looking approach from the government, emphasising on allocating funds to enhance technology-powered innovative healthcare models tailored for India's diverse population."

He also stressed the importance of allocating funds to bridge existing gaps and fortify the digitalisation of the healthcare economy.

Emphasis on Digital Health Transformation

Shyatto Raha, founder & CEO of MyHealthcare, noted that in anticipation of Union Budget 2024, aligned with India's aspirations in Amrit Kaal 2047, the healthcare sector envisions a transformative leap for the nation's healthcare landscape.

He said, "The Ayushman Bharat Digital Mission (ABDM) has been a monumental stride, fostering connectivity among all stakeholders in the healthcare ecosystem. However, to fully unlock the transformative potential of digital health, it is imperative for the government to reinforce its commitment and bridge existing gaps."

He further emphasised that while ABDM lays a robust foundation, there is a pressing need for the government to incentivise healthcare providers and health-tech companies. This would actively deliver the healthcare digitalisation roadmap and build a unified healthcare system. Raha suggested the government should explore the opportunity to engage healthcare startups, fostering a partnership between the National Health Authority and healthcare providers. Implementing clinical ecosystems like electronic medical records (EMR) can help build a digital longitudinal history of patients.

Through the NHA ecosystem, this can deliver a unified healthcare system for patients, aiding standardisation, offering better insights into clinical data analytics, and improving patient care outcomes. Such an approach encourages healthcare providers to embrace digital technologies and empowers entities to contribute significantly to the government's vision of building an effective healthcare system for India. Raha hopes Union Budget 2024 will emphasise building an implementation roadmap for healthcare digitalisation, incentivising the sector to achieve PM Narendra Modi's vision for Amrit Kaal 2047 and delivering quality healthcare for all.

Wrapping Up

As the healthcare industry eagerly awaits the Interim Budget 2024, the expectations and recommendations put forth by key players reflect the industry's commitment to growth, self-reliance, and technological advancement.

The proposed measures, ranging from increased custom duties to incentivising digital health initiatives, aim to address the challenges and opportunities in the Indian health tech sector. The upcoming budget holds the potential to pave the way for a transformative leap in the nation's healthcare landscape, aligning with the vision for Amrit Kaal 2047 and delivering quality healthcare for all.